Downstage theatre in Wellington, which has announced it is closing, says it could barely survive on the money it was receiving.
The company will close curtains for good this weekend, after nearly 50 years of operation.
Chief executive Hilary Beaton blames Creative New Zealand's decision not to fund the theatre next year.
She says Downstage's mandate has always been to pay professional fees and wages to its actors and staff, and its annual funding of about $345,000dollars put the company under unworkable pressure.
Creative New Zealand says its decision to stop funding is based on a decade of declining audience numbers and financial targets.
Chief executive Stephen Wainwright says it could not continue its support when there were other art organisations making stronger cases for money.
Other companies may now fall over says actor
A New Zealand actor and director says some smaller theatre companies may fall by the wayside now Downstage will not be around to support them.
Actor and director Miranda Harcourt says many successful careers in the arts began at Downstage, which has also been helping a number of young, vibrant companies with things like production and sound design.
She says some of those will not be able to survive on their own.
Ms Harcourt says there is an argument for continuing to fund anything that makes such a vibrant contribution to the performing arts.
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