Taunton Deane Borough Council will make a bid to secure the leasehold on the Brewhouse Theatre to safeguard its future as a public arts venue.
The Somerset venue went into administration last month citing funding cuts for its closure, with visiting companies claiming they were owed thousands of pounds in unpaid fees.
If successful in its bid to administrators BDO, the local authority plans to appoint an organisation to run the Somerset theatre because it has “neither the expertise nor resources to do so”.
The council currently owns the freehold for the site and is looking to secure the remaining 61-year lease.
The organisation that is assigned the lease will have access to the council’s annual grant of £152,000 for the 2013/14 period, provided its plans for the venue are aligned with the local authority’s cultural ambitions for the area.
A further £35,000 has also been set aside for developing new proposals for the site.
As part of this budget, the local authority will appoint a temporary independent adviser to oversee potential business models for the venue and ensure that any organisation, group or individual bidding for the lease will make its future financially stable.
The deadline for bids to BDO for the remaining lease is April 12.
Taunton’s full council will make a decision on whether to support the local authority’s bid on April 9.
Council leader John Williams said: “The borough council’s bid, if accepted, will help us to safeguard the theatre building and contents as an important performing arts centre while a financially sustainable future is sought.
“Our bid reflects our commitment to the future of arts and culture in Taunton. As a council we are aware just how important it is for our county town to have a thriving theatre and artistic offer.”