The Arts Council announced swingeing cuts in funding to 212 organisations today, while granting 17 others a last-minute reprieve amid criticism from notables in the arts world.

Some higher profile venues, such as the Bristol Old Vic and Bush Theatre in west London, were celebrating after pleas from celebrity supporters led the council to reverse its decision to withdraw grants.

The Norcott Theatre in Exeter and Scarborough’s National Student Drama Festival are, along with the renowned Bristol theatre, among nine organisations granted a total reprieve.

A further eight organisations, including the Bush, the Birmingham Opera Company and the Crafts Council, are to have their funding partially restored.

Stars including Dame Judi Dench, Sir Ian McKellen and Harry Potter actor Daniel Radcliffe had campaigned for the continued funding of the Bush Theatre, while National Theatre artistic director Nicholas Hytner lobbied personally on behalf of the Northcott Theatre and the National Student Drama Festival.

But many smaller and less glamorous organisations have not been so fortunate and are now contemplating an uncertain future.

Some 185 organisations are to lose their funding entirely, leaving them facing possible closure, while a further 27 are to see their grants substantially reduced.

Representatives of these today lashed out at the decision to grant reprieves to celebrity-endorsed venues while, they claimed, ignoring the social and educational value of smaller community-based organisations. One such venue is the Norwich Puppet Theatre, which has entertained children in the local area for the past 27 years. It will be forced to shut down unless replacement funding can be secured.

Ian Woods, the theatre's general manager, said: “We are extremely disappointed. We had hoped that our submissions would be given due consideration and that we would be reprieved. Sadly, that has not happened.

“We are the only theatre in the whole of the eastern region which puts on a year-round programme of family-centred entertainment. The Puppet Theatre is often the first experience of live theatre that young people have. We go into schools and schoolchildren come here on educational visits.

“We are also a national resource for puppetry, people come and work for us here then set up their own companies.”

Referring to the celebrity support for other venues, Mr Woods said: “It’s not just big names that get you big bucks, because some smaller organisations have done well - but it would appear that it doesn’t hurt.”

The Pop Up Theatre company in north London, which plays to an annual audience of 25,000 in theatres, art centres and schools, has also seen its funding pulled entirely, with the Arts Council citing low artistic quality.

“The evidence the Arts Council put together was deeply flawed,” Frederica Notley, the executive director, said. “The whole process has been unnecessarily difficult and opaque.”

“We are a very small-scale company and most of our work is with young people who don’t have much of a voice. Unfortunately we are not as starry as some other things.”

But Sir Christopher Frayling, Chairman of the Arts Council, launched a vigorous defence of the decision, insisting the body was “not a cashpoint machine”.

He rejected suggestions that the council had been swayed by celebrity backers. “This has not been about the sophistication of campaigns. It has nothing to do with the decibel level, it really doesn’t,” he said.

The Bush Theatre had been threatened with the axe due to “misunderstandings on both sides which have now been resolved”, he explained. Meanwhile there was a feeling that some organisations had “run out of puff” or were on a “downward curve”.

Unveiling the spending strategy for 2008-2011, he said: “We are redistributing resources, not treating the arts as a fixed landscape for all time. This is the strategy of a confident organisation that is prepared to take risks, just as we ask our arts organisations to take risks.

“We should always go for excellence and not shy away from difficult funding decisions when the need arises.”

The Arts Council’s total investment over the next three years amounts to £1.3 billion and will be distributed among 888 organisations.

Winners from the reallocation include the Roundhouse in Camden, north London, which, with its ability to draw big name artists such as Sir Paul McCartney, has seen an above-inflation funding increase of more than £400,000.

The Arts Council has also granted funding for 81 new groups and venues, including Preston City Caribbean Carnival, the Whitby Musicport world music festival and Upswing Aerial, a performance arts group which blends acrobatics and elephant riding.

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