According to the BBC, the company may have to start issuing redundancy notices to its 40 workers after the funding agency removed Gwent Theatre from its list of revenue funded arts organisations.

Gwent Theatre currently employs six full-time staff, as well as a number of contract-basis workers but has warned it could face the prospect of being wound up unless the shortfall can be met.

A statement issued by the theatre group following the initial ACW decision said: "Large organisations which have suffered cuts may survive but, for a small company like ours, the loss of £250,000 a year probably means winding up."

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