Europe's largest youth theatre, the Chicken Shed Theatre Company, has made 14 redundancies and will cease productions for six months due to a £200,000 funding deficit.
The theatre company, which was asked to represent the future at the Queen's Golden Jubilee celebrations last year, is facing the biggest funding problem in its 30-year history.
"Our main source of income is from trusts and foundations, but because of the current economic climate the money we receive from them is down by 25 per cent," said Chicken Shed's chief executive John Bull.
The company was badly affected when the Association of London Government introduced competitive bidding for its culture grants earlier this year, a move that penalised several art groups (Third Sector, 16 April).
The theatre plans to continue with its Christmas production The night before Christmas, but will then halt productions for six months while staff work to generate funds.