ONE of the country's leading theatres has warned that a cut in its grant from Scotland's national arts funding body will have a damaging impact on the industry as a whole.

Directors at The Lyceum Theatre in Edinburgh issued a statement after the grant allocations were announced by Creative Scotland, with the organisation receiving £3 million over three years - a reduction of 17.5 per cent.

Other smaller theatres and music groups, including Cumbernauld Theatre, saw their awards increase, and Ayr Gaiety and the Beacon in Greenock were given financial support for the first time.

But Alex McGowan, executive director, and Mark Thomson, artistic director at The Lyceum, said they were extremely disappointed by their allocation, which they said would amount to an effective funding cut of almost £1.5m over a 10-year period.

They said: "It is a very damaging cut not only for The Lyceum but for producing theatre in Scotland.

"We are playing a vital role in sustaining a theatre industry in Scotland so this decision seems like a perverse punishment for acknowledged success. The Lyceum is now faced with re-thinking our business model in less than six months."

Stornoway arts centre an Lanntair said its funding of £1.21m over three years presented a "fantastic opportunity to create a truly engaging and inspirational future programme and to really drive forward the already dynamic creative sector in the Outer Hebrides".

The Work Room Choreographic Foundation said the award of £330,000 over three years would allow it to provide vital support to artists.

Aberdeen Performing Arts was given £1m over three years. Its chief executive Jane Spiers said it was a vote of confidence in the company and marked a step-change for the city of Aberdeen.

However, the Scottish Youth Theatre and Aberdeen's Sound festival of contemporary music also lost out on the allocations.

John Scott Moncrieff, chair of Scottish Youth Theatre, said they were disappointed but were in "active dialogue" with Creative Scotland to identify the best approach to long-term funding.

Fiona Robertson, director of the Sound festival, said the loss of regular funding would impact "significantly on our ability to commission new work and achieve our ambitions for new music in Scotland".

A spokesman for Creative ­Scotland said: "The Royal Lyceum Theatre in Edinburgh continues to be a valued and hugely ­important organisation in the context of theatre in Scotland.

"We will continue to work closely with The Lyceum and we will be meeting with them to discuss their future plans and how we support these plans."