THE Arts Council has been forced into a partial climbdown to reprieve about 25 of the theatres, orchestras and dance groups whose grants it had threatened to scrap.

Its retreat follows a fierce campaign from prominent figures such as Kevin Spacey, Sir Ian McKellen and Dame Judi Dench.

Sir Christopher Frayling, the quango’s chairman, speaking ahead of Tuesday’s board meeting, confirmed he had reconsidered the decision to withdraw funding from 194 organisations, about a fifth of the total.

Brushing aside the more vitriolic criticism of the policy – dismissed as “bollocks” by Nicholas Hytner, director of the National theatre – Frayling said: “It is not the decibel count which has influenced us, but reasoned argument.”

Among those likely to be spared are the Bush theatre in west London, where the writers Stephen Poliakoff and Mark Ravenhill began their careers, and the Northcott theatre in Exeter, where John Nettles and Robert Lindsay once trod the boards.

Closure of the Bush theatre would have destroyed an influential centre of new writing, while closure of the Northcott would have left theatregoers in Devon with no real alternative.

It is understood the National Student Drama Festival, where Stephen Fry, Simon Russell Beale, Rik Mayall and Timothy West once performed as undergraduates, will also be spared. It was set up in 1956 by the Sunday Times drama critic Harold Hobson and the newspaper has supported it financially ever since.

Others expected to escape at least some of the proposed cuts include the London Mozart Players, a chamber orchestra, Queer Up North, a Manchester-based gay and lesbian arts festival, and Anjali Dance, a London company for dancers with learning difficulties.

Two specialist publishers that translate foreign works into English, Dedalus and Arcadia, are also likely to be spared, as is Eastern Angles, an Ipswich theatre touring company.

Over the past week the nine regions of the Arts Council have considered 126 appeals from the 194 bodies set to lose their funding and the 80 due for some cuts. Their decisions have now been taken and will be discussed then ratified by the full Arts Council.

It has become clear some of the evidence upon which the Arts Council made its recommendations was wrong. This was the case at the Bush, whose campaign to avert the cut in its grant won the support of Sir Tom Stoppard, Harold Pinter and Sir Salman Rushdie. The Bush’s most recent big success was last year’s Elling, starring John Simm, which transferred to the West End.

There was also a misunderstanding about the National Student Drama Festival. The decision to remove its £52,000 grant was taken by the council’s Yorkshire region, which is now judged to have failed to take into account the national significance of this festival More than 3,000 people signed a petition to save the festival, including Lord Lloyd-Webber, Hytner, Thelma Holt, the West End producer, and Baroness Blackstone, the former arts minister.

Frayling has himself been lobbied, with letters from Dench, McKellen and Sir David Hare, who asked Frayling to explain why he had not talked publicly about the planned cuts.

Frayling is not happy about some aggressive protests. He is critical of Equity, the actors’ union, which he believes is inherently opposed to change, and is angry about Hytner’s pointed remarks earlier this month. The theatre director also described the Arts Council’s regional bodies as “tyrannical fiefdoms”.

“This is a bit rich of Nick when his National theatre has been a double winner,” said Frayling. “Also, I don’t think calling us ‘bollocks’ is what would pass as a critical judgment.”

The National is to receive an inflation-linked increase for the next three years plus extra funds to enable it to open on Sundays.

Arts organisations will learn their fate by Thursday. The Arts Council’s members include Brian McMaster, former director of the Edinburgh festival; Sue Woodford Hollick, head of London Arts and wife of Lord Hollick, the Labour peer; and Alice Rawsthorn, former director of the Design Museum.

Aggrieved organisations will still be able to go through the council’s formal complaints procedure and then seek judicial review. “While we accept the Arts Council’s right to introduce change, we do not think the process has been consistent, transparent or fair,” said Jeremy Hunt, shadow culture secretary.

Frayling now accepts it was a mistake of the council not to publish a list of the 194 organisations whose grants were to be removed. It was left to them to go public or contact media outlets.

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