The Welsh Language Board has agreed to help ease the National Eisteddfod's financial crisis by handing over £40,000.
This year's festival in Newport made a loss
The organisation said more money may be donated at a later date.
The festival's organisers met in Caernarfon on Monday night to discuss ways of cutting costs to ensure that it survives.
However, the Assembly Culture Minister ruled out an "open-ended cheque" to bail out the event.
Earlier, an emergency meeting in Aberystwyth heard the eisteddfod needed to save £200,000 a year.
Spending will be cut in the visual arts exhibition, the youth activities centre and drama.
However, Elfed Roberts, the festival director, said he hoped to be able to continue all three sections, possibly in partnership with other organisations.
Cuts will also be made to the eisteddfod's central administration with the possible amalgamation of the two offices organising the alternating north and south Wales festivals.
Further discussions will be held over the coming weeks and Mr Roberts said he hoped the Welsh Assembly Government might agree to a one-off grant of £300,000.
However, Assembly Culture Minister Alun Pugh ruled out a blank cheque.
"I understand that the eisteddfod has some considerable financial difficulties but the solution is not the Welsh Assembly Government writing open-ended cheques to cover any deficits," he told BBC Radio Wales.
Mr Pugh added: "We're not in the business of telling the eisteddfod what they need to promote or cut back on, but clearly the eisteddfod needs to appeal to a broad range of people.
"Of course Welsh has a special place but it needs to appeal to the 80% of people in Wales who don't speak both languages of Wales and also to an international audience."
Forty of the 60 members of the ruling council attended the special meeting at Ysgol Penweddig, in Aberystwyth, on Saturday afternoon.
Speaking after it, president of the eisteddfod court, R Alun Evans, did not rule out possible job losses.
But it had been suggested before the meeting that some of the eisteddfod's 21 staff could lose their jobs to help make up the deficit.
Eisteddfod director Elfed Roberts said he could not predict what would happen if savings were not made.
"The thing we have to ensure is that the eisteddfod is going to be here in the future," he added.
Earlier this month, it was revealed that the body needed to raise £300,000 or face having to make drastic cuts to next year's event in Gwynedd.
The Welsh Language Board has already given £360,000 to the eisteddfod this year, is expected to make an official announcement on the funding on Monday.
Officials had anticipated a loss of £200,000 at the recent Newport event, on top of losses in St David's in 2002 and Denbigh in 2001.
Last year's event in Meifod, near Welshpool, Powys, made a small profit.
The meeting is expected to review the problems, which were exacerbated by a cut of £100,000 to the eisteddfod's annual grant from the Welsh Language Board back in1997.
The festival now gets £16,000 less every year than it did seven years ago.
At the Newport event in August, an appeal was launched to avert the crisis, which has so far raised in the region of £75,000.
Speaking last week, Richard Morris Jones, chairman of the executive committee for the Eryri and District Eisteddfod next year expressed his concerns.
"We have to accept that the situation is quite serious and that the whole future of the eisteddfod is in the balance," he said.
"Something needs to be done immediately.
"As far as Eryri is concerned, we are still quite confident that we can create a memorable eisteddfod that people will enjoy.
He said that local fundraising was going well, but that only accounted for one tenth of the cost of the eisteddfod.
"I think that the politicians are playing some sort of a game - the Welsh assembly government could tomorrow save the worry to the people who are working hard in Eryri and Swansea.
"It's a small amount of money to compare with what is invested in other projects.
"They must address the situation."