Birmingham Opera Company, which presented a co-production of La Traviata to almost 10,000 people at the National Indoor Arena in October, could face closure after losing its Arts Council grant.
The company is one of a number across the country facing the axe following an Arts Council review. It has until the middle of January to lodge an appeal.
The Council said it had misgivings about the structure of the company, which has a full-time staff of just two and hires personnel for each production. It currently receives annual grants of £324,000 from the Arts Council and £197,000 from the city council.
Last night its general manager, Jean Nicholson, said she doubted the company could survive if it had to apply for Arts Council project grants, which are capped at £100,000.
The company, formerly known as City of Birmingham Touring Opera, abandoned its former touring role in 2001 in favour of putting on one major project each year, recruiting performers from the local community to perform alongside professional singers.
Past productions have included Beethoven's Fidelio in a tent in Aston Park and Bernstein's Candide in a since-demolished factory in East-side. "On the face of it we live in the lap of
luxury, but opera is an incredibly expensive art form," Ms Nicholson said. "We manage to wheel and deal with a lot of people, including Graham Vick, and we bring a lot of added value in that way. We are able to employ people whose value is way beyond what we can afford to pay."
The Arts Council is understood to have disapproved of the company's decision to bring
Vick's production of La Traviata to the NIA, regarding it as too great a financial risk.
The production reflected the influence of Vick's Birmingham experience on his international work, having been staged in Verona with a community cast. In Birmingham a locally-recruited cast joined some of the company's regular professional singers, the City of Birmingham Symphony Orchestra and the original sets from Verona.
Facing the daunting task of selling 10,000 seats for the two nights, the company sold 9,908 and made a small surplus, even though many in the audience paid only £5 to see the show.
Last night an Arts Council spokesman said: "While we recognise the quality of Birmingham Opera Company's work, we have been talking to them for some time to flag our concerns about aspects of their business and financial models. We are still in constructive talks to explore other funding opportunities available to them."