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Fears that St Edmundsbury Borough Council might withdraw its entire grant to Haverhill Arts Centre have proved justified in this year's budget.

The £158,000 is one of the biggest savings in the budget due to be agreed by the borough's cabinet on Wednesday.

Haverhill Town Council had feared the borough might cut the Arts Centre adrift without the funding it had been providing under a reducing agreement, and put up its council tax precept last year to cover the shortfall.

Last year was the final year when the town council would have been able to put up its precept appreciably without running the risk of the public calling for a costly referendum under new regulations which came in this year.

The grant cut marks the end of the borough council's controversial relationship with the building since it carried out the conversion from town hall to Arts Centre in 1994 at the cost of £1m.

Fears that borough cuts to the building's funding would reduce it to a community hall spurred Haverhill Town Council into taking its management over in 2002, after heated public discussion over its future.

A system of funding via grants from the borough council was agreed but the town council always doubted the borough's commitment and feared it might not continue idefinitely.

This resulted in fears that such a cut could result in the buildimng having to close, which was why the town council took the decision to raise its council tax before it happened.

In the report which goes before Wednesday's cabinet meeting, borough finance officers say the move is made in the light of the town council's decision to raise the shortfall via precept.

Town councillors had kept a slim hope the grant would continue and therefore the extra precepted money could be used for much-needed projects within the town, or even returned to council tax payers, a hope which has now been dashed.

The borough council is expected to agree another freeze on its element of council tax, the third in four years, achieved by savings of £2.15million and an overall budget reduction of nearly £0.5million.