A theatre in Highgate may have to cut up-and-coming talent from its programme if new funding is not approved.

Arts Council England will withdraw funding to Jacksons Lane theatre, in Archway Road, next March if it decides its buildings are not fit to use.

The theatre, which prides itself on its encouragement of new talent, has received around £150,000 a year from the Arts Council since 2005, plus £220,000 in capital awards and project funding.

But roof damage forced the theatre to close for a year from January 2007 and the Arts Council has requested a report from Haringey Council to prove the theatre has a sound future.

Following the loss earlier this year of £70,000 from London Councils funding, the theatre is relying on the Arts Council to keep its innovative artistic programme afloat.

Artistic Programmer Adrian Berry said: “There is no risk of closure, but there is a risk that we’ll have to withdraw our theatre programme, including our exciting circus, dance and comedy projects.

“We would be forced to rely more on room hires and commercial use. But this is a worst case scenario and we are confident it will not come to this.”

About half of the theatre’s income currently comes from grants and charitable contributions. But Jacksons Lane chief executive Kate Sarley was adamant the theatre would not drop its artistic programme if funding was cut.

She said: “If we lose the funding it would be a matter of concern, and we may have to change our slant and go for a few more hires. But it is still very important for us to have an artistically led programme.

“We still wouldn’t put just any old tosh on, and we would hope the public wouldn’t notice the difference.”

An Arts Council spokesman said: “The quality of Jackson's Lane's artistic and community programme was never in doubt. However, we have had long-held concerns about the capital investment needed to make the building fit for purpose as a resource for artists and audiences, and doubts that the landlord, Haringey Council, was committed to the necessary on-going level of investment.

“While these concerns remain, responses received from Jackson's Lane and Haringey led us to offer the opportunity for both organisations to demonstrate that a sustainable future for Jackson's lane is possible.”

Christmas Carol, by Adrian Berry, will be showing at Jackson Lane theatre from December 11 to January 4. Call the box office on 0208 341 4421 for tickets.