A theatre in England has threatened to charge customers from north of the border higher admission prices.
The Maltings is considering higher admission for Scottish customers
The Maltings in Berwick-upon-Tweed claims 41% of people using the arts centre come from Scotland.
As a result, management said a request had been made to Scottish Borders Council to provide £50,000 of support.
SBC has dismissed the call as "absurd". The theatre has confirmed it is now considering higher charges for people from outside Berwick using the centre.
Director Maurice Ward said the Maltings board would be meeting soon to determine pricing levels.
He confirmed that it would be considering a discount scheme for Berwick residents.
"This means, in effect, that users outside the borough would be paying higher prices to compensate for the subsidy already being paid by the tax payers of Berwick," he said.
"We would urge residents in the Borders area to lobby their councillors suggesting that they reconsider their position not to provide any funding to the Maltings.
"It is not equitable that Berwick council tax payers should provide such a large subsidy for regular users outside the borough."
Berwick Borough Council gives a £254,000 subsidy to the Maltings with £128,000 of that to cover running costs and maintenance.
Directors have said they would like to see SBC pay 41% of the running costs - about £50,000 - because of the number of people from the region using the centre.
Berwick Borough Councillor Jim Smith, who is also on the Maltings board, admitted that imposing a higher price for Scots could be unworkable in practice.
However, he felt the solution would be resolved if SBC made a contribution to the running costs.
SBC leader David Parker said the call was "absurd" and any plans to charge Scots at a higher level would probably be illegal.
"The theatre is in another local authority area and indeed in another country," he said.
"We do not fund theatres in Edinburgh, Midlothian and East Lothian so I do not see why they should be any different.
"A lot of people from Berwick and south of the border use the Eyemouth Leisure Centre and we do not charge them extra for it.
"It is absurd in my view."
South of Scotland SNP MSP Christine Grahame also hit out at the move as "a dangerous route to take".
Alan Hasson, head of community services at SBC, said they had no record of the funding request but added that it would have been rejected anyway.
"On the request of the Maltings we encourage people to use their facilities by promoting events in our What's On magazines," he said.
"But we have an arts centre and theatre at Eastgate in Peebles and would not consider charging people from Midlothian for using it."