The Wales Millennium Centre (WMC) in Cardiff Bay has been warned that it is in serious danger of insolvency.
The arts centre in Cardiff Bay has become a landmark venue
The warning is in an unpublished review, commissioned by the Welsh Assembly Government, and seen by BBC Wales' Dragon's Eye programme.
It says the £106m arts venue has debts of £13.5m and is predicted to sustain considerable losses in future years.
WMC has said it currently cannot repay the debt, which is guaranteed by the assembly government until December.
In its annual accounts for 2006, which were filed on Tuesday, WMC's auditors KPMG say "considerable uncertainty" in achieving a settlement with the assembly government "may cast significant doubt about the group's ability to continue as a going concern."
Conservative assembly leader Nick Bourne has accused the assembly government, which is being asked to bail out the centre, of burying the report which was completed in June.
First class institution
He said "I am very alarmed and concerned. It seems to me that the government is suppressing bad news.
"It is bad news because this place is a first class institution and deserves our support. We should have known about these problems along time ago because clearly the government knew".
Culture Minister Rhodri Glyn Thomas says he cannot give an interview to BBC Wales because of commercial confidentiality.
But an assembly governnment spokesperson said: "We fully understand the affection with which the Millennium Centre is held be the Welsh people, and the concern that has been expressed about the financial difficulties that the centre is facing."
WMC chairman Lord Rowe-Beddoe is to meet the culture minister next Tuesday and the centre hopes that the assembly government will repay the £13.5m loan and increase its subsidy to between £3m and £4m a year.
The Queen attend a gala evening to launch the centre three years ago
The review was commissioned by the former Culture Minister Alun Pugh, and has been written by a team of experts in the field drawn from around the UK.
The report says the debt should be removed from WMC because it does not have the means of servicing or repaying it.
In their annual accounts for 2006 the WMC itself has warned that uncertainty surrounding funding from the assembly government may "cast significant doubt" about their ability to continue as a going concern.
The £106m landmark venue was opened by the Queen in November 2004.
It is the home of Welsh National Opera, Diversions dance company, the Urdd eisteddfod and hosts regular musicals, ballets and music events, while there is also a studio theatre.
In September, it announced it had passed a "landmark" £20m in ticket sales and had attracted more than 1.5 million visitors from Wales and further afield.