The Arts Council board is meeting to decide how much money is needed to stop the English National Opera (ENO) from going bust.
The English National Opera was given a £4.2m grant to survive
The board is discussing whether ENO deserves a publicly-funded rescue package.
The opera is currently seeking to cut up to 100 staff, despite a £4.1m grant from the Arts Council in January.
What ENO must do is take their own destiny into their own hands
"We are not going to give them any money as long as we think it is going to be bad money after good," said a spokesman for the Arts Council.
"What ENO must do is take their own destiny into their own hands.
"The company must come to us with their own plan as to how they will get themselves out of their current situation.
"Based on that, we will then make a decision on whether we can justifiably use public money to help them out."
The plan for redundancies follows a warning by ENO chairman Martin Smith that job cuts were needed for the company to survive.
English National Opera intends to sack a fifth of its 500-strong company, beginning with voluntary redundancies in June.
Tony Legge, the ENO's head of music, hit headlines when he offered to take redundancy, but a spokesman said he did not know when or if Mr Legge would be leaving.
Last month members of the opera company's chorus went on strike in protest over proposed cuts to its numbers.
Adding to the company's problems, cleaning staff at ENO are to be balloted for strike over the next few days in protest at redundancies among their numbers.
And chorus members are considering a second walkout on 3 April, to coincide with the British première of The Handmaid's Tale.
The recent crisis has been blamed on expectations of box office receipts being too high and the effects of the terror attacks on the US on 11 September on tourism.