The playhouse has a theatre and a cinema
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Sevenoaks Playhouse has chosen to close at the end of July following years of financial difficulty.
The charity which runs the venue launched a cash appeal after Sevenoaks District Council cut its grant.
Ray Russell, spokesman for the playhouse, said around 20 staff were to lose their jobs and only a miracle could keep it open.
A spokeswoman for the council said she was "bitterly disappointed" the playhouse had ceased to trade.
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I would like to see the council deliver on its statement that it will keep arts provision in Sevenoaks and I think it will
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The charity tried to find £250,000 after the council cut its annual grant by £40,000 from April.
A spokesman for the district council said it agreed a three-year grant package with the charity in October 2004, which also receives funding from Sevenoaks Town Council and the Arts Council.
"It's a private business and we can't keep funding a business," he said.
Mr Russell, who works voluntarily as the acting chief executive of the playhouse, said the building would return to council control in August.
'Temporary management'
"I would like to see the council deliver on its statement that it will keep arts provision in Sevenoaks and I think it will."
Councillor Felicity Broomby, who is responsible for the arts, said: "We must now look to the future. We are committed to arts provision in the town and will be looking at arts provision as a matter of urgency."
In a statement, the council added a pledge to do all it could to keep the facility open and would use the coming weeks to establish residents' views on arts provision.
Re-opening the theatre under temporary new management had not been ruled out, it said.