On Saturday night the Cologne Opera will perform their version of Richard Strauss's Capriccio at Scotland's premiere international arts festival. That a German company and not Scottish Opera will take to the stage is being seen as the legacy of cuts made by the Scottish Executive three years ago.

On Saturday night the Cologne Opera will perform their version of Richard Strauss's Capriccio at Scotland's premiere international arts festival. That a German company and not Scottish Opera will take to the stage is being seen as the legacy of cuts made by the Scottish Executive three years ago.

Yesterday, arts chiefs said the reason why Scottish Opera did not have a production at this year's Edinburgh International Festival was because it was £200,000 cheaper to hire a German company.

Scotland's national company had been approached to stage an opera but it had proved considerably cheaper to work with Cologne Opera instead, Jonathan Mills, artistic director of the EIF, said yesterday.

Whereas the German opera is well staffed and equipped, and heavily subsidised, its Scottish counterpart needs to buy in a chorus and lacks the equivalent state support.

Questions about the omission of Scottish Opera from the festival line-up were prompted by the presence of all the other national companies. The National Theatre, the Royal Scottish National Orchestra, Scottish Ballet and the Scottish Chamber Orchestra are all represented with major productions at the EIF.

Mr Mills was speaking yesterday at a public debate on the future of the entire festival season in Edinburgh.

In response to a question from the floor about the absence of the Glasgow-based company, Mr Mills said: "The fact remains that in terms of Scottish Opera as they are currently constituted, it is very, very expensive for us - prohibitively expensive for us - to work on new work with Scottish Opera.

"The example this year was that I offered Scottish Opera a project, very similar to one in the festival, and the cost of bringing a foreign company to do that work, and the cost of Scottish Opera, was £200,000 more for Scottish Opera".

In contrast, last night Alex Reedijk, the opera's general director, said that it was timing issues, not cost, that scuppered any chance of a Scottish Opera production at the 2007 festival, as both he and Mr Mills were new to their jobs last year.

Mr Reedijk said: "Certainly, we have been talking about a number of projects, but the reality is that it takes a bit of time to get it working, and there really wasn't enough time to get it right. I don't think we ever got down to cost being an issue. He was new to the job, I was new to the job, and we would have loved to work together - we are very hopeful of doing something in 2008."

After the debate, Mr Mills said: "The difference is that you are dealing, with Cologne, with a company that is heavily subsidised; they have a chorus.

"With Scottish Opera you need to buy things in, a chorus, costuming and wardrobe, everywhere you turned with Scottish Opera you were paying for something, whereas in Cologne all those things were already part of the institution."

In 2004, a funding deal with the Scottish Executive involved the redundancy of 88 Scottish Opera staff, including the chorus. The opera was forced to trim £1m from its costs, live within its grant, and pay back a £4m loan over three years.