The theatre has a capacity of 352 seats
The on-going saga of the funding for the Brewhouse Theatre in Taunton is set to continue as the council is now giving "serious consideration" to awarding extra funding.
The Brewhouse has been under financial pressure for some time.
The theatre's plight has attracted national attention, with Lyn Gardner from The Guardian newspaper raising
of what regional theatres have to do to survive.
Under Robert Miles' leadership, the theatre has put on a "modern and challenging programme", but in today's climate of financial pressure, the theatre has found itself with a funding black hole, which could be as much as £250,000.
The theatre receives funding from three main areas; Taunton Deane Borough Council, Somerset County Council and the Arts Council. Out of those, the local council is the biggest funder.
In April, the board of trustees was warning that if a solution could not be found to the funding crisis, the theatre might have to close.
The Taunton Deane MP, Jeremy Browne, became involved by writing to the the South West Arts Council asking for more money, saying at the time: "There seems to be some evidence that other counties in the south west are getting more funding per head of population than we are."
The theatre has a capacity of 352 seats so it cannot "trade" its way out of danger.
Since then, Taunton Deane Borough Council have held several meetings to discuss their funding support to the theatre.
In June, they agreed to give extra funding of £50,000 per year on top of it's annual grant of £152,000.
This extra funding is subject to several conditions which aim to mark the theatre's progress.
Councillor Fran Smith, who holds the economic development and arts portfolio, has agreed a number of issues on behalf of the Executive in respect of the Brewhouse following talks with its Board.
Councillor Smith said: "Taunton Deane Council is encouraged by the positive commitment of the Brewhouse Board to reducing costs and generating extra income.
"Both the Council and the Board are confident that a secure and successful future for the Brewhouse can be achieved by all parties working together."
Fears the theatre will shut down are not warranted - people would instead see a much reduced Autumn programme of events instead.