The Rose Theatre has begun negotiations for a second cash bailout when its controversial £1.8m rescue deal expires next December.

The request for more help from the public purse comes at a time when elderly and disabled people in Kingston are facing a price hike for basic services.

Kingston Council is also looking to save £10m and cut 200 posts over the next three years.

Anthony Simonds-Gooding, chairman of the Rose Theatre, would not be drawn on the amount the cash-strapped venue would ask for.

But he said there was “no question” the theatre – which has seen established actresses such as Dame Judi Dench tread the boards – would “definitely need money”.

Asked about pressure to stop funding in the light of cuts to council services, he said: "That is totally understandable. That is the tricky balancing act the council has to do."

Councillor Derek Osbourne, leader of the Liberal Democrat-controlled council, said: "There are discussions taking place on what a new deal might look like in terms of services and what we would expect.

"No theatre outside the West End runs without public support – either a local authority or the Arts Council, or both."

However, disability campaigner Jane Young questioned the council’s commitment to vulnerable people.

She said: "They should not be giving extra funding to the theatre when they are reducing their council support."

Howard Jones, leader of the Conservative opposition who described the 2008 bailout as "nothing short of scandalous", said: "To spend money in this particular area at this particular time when you have got cuts to community care is a very difficult decision for any council administration, even this council that is thoroughly supportive of the theatre."

News the Rose would get £600,000-a-year from the council was criticised when it was revealed in November 2008.

As part of the deal, the council extended an initial separate £1.8m loan to 100 years interest free and waived £160,000 of interest payments from one of two £900,000 loans.

Kingston University was also asked to hand over £300,000-a-year to secure its use of the venue.

In return, the theatre was meant to enhance its involvement in the community, giving over space to Kingston Readers’ Festival, youth theatre programmes and much more.

At the time, Coun Osbourne was quoted as saying the option to fund the theatre, or spend £450,000 in the first year to close it, was a “no-brainer”.

He also said: “Once people have been here, they will stop saying why are you funding the theatre?”

Coun Osbourne said detail on ticket sales was commercially confidential.

He promised to honour the full payment of the final £600,000 saying reducing it would be “unethical”.

Since the Liberal Democrats originally persuaded developers to build the empty shell, Kingston Council has invested £8.4m – made up of a £1.8m loan to the Rose Theatre Trust, which runs the theatre, and £6.8m invested in fitting it out.

The building itself is worth several million pounds more, taking the total public money invested so far to about £11m.

In August 2007, Coun Osbourne originally pledged to close the public purse strings after handing an extra £250,000 to the Rose to fit it out.

But in May the company set up by the council and university to fit out the theatre was forced to ask for an extra £350,000 to pay for cost overruns on doors, wiring and footwells, taking the final prce tag to £7.15m, more than £638,000 over the original budget.

Kingston University said it would decide this summer whether to continue funding the theatre.

The university's MA theatre course operates from the Rose and it also benefits from hosting graduation ceremonies in the theatre.