More than 50 employees have been made redundant following the shock closure of Taunton's Brewhouse Theatre and Arts Centre.
Drastic cuts in public funding have forced the 352-seat venue to call in the administrators today, and the centre will be closed while its future options are considered.
The theatre's 20 full-time and 35 part-time staff have all been made redundant as a result of the closure.
Paul Birch, chairman of the board of governors said: “In the current harsh economic climate and against a background of long term underfunding for The Brewhouse, the position has become untenable.
"Even with regular high attendances, such as our final performance of Hull Truck Theatre’s Jane Eyre last night, which sold out weeks ago, the economy of scale no longer works in our favour.
"In short, taking tickets sales and other revenue streams together, The Brewhouse raises about 60 per cent of what it needs to keep going and with inadequate public investment it is impossible to achieve this."
The Brewhouse lost its Arts Council England funding in 2005, and also saw its funding from Taunton Deane Borough Council cut by 25 per cent.
Five years later, it lost all direct funding from Somerset County Council.
The theatre and gallery desperately needed more investment from its stakeholders, but was unable to secure an agreement in time to stay open.
Artistic director and chief executive Robert Miles said: "The Brewhouse has worked as efficiently as it can to provide the best and most accessible arts provision for Taunton and the surrounding area.
"Its restaurant, front-of-house concessions and fundraising activity has all brought additional income into the building, but ultimately 352 seats does not give the margins which we need to survive.
"I apologise to all the suppliers, ticketholders and visiting artists that this will affect, the trustees were left with no other option.
“Everyone here has been incredibly committed to bringing the arts in all forms to the communities we serve and we are deeply sorry for the position we find ourselves in.
"I would like to thank the wonderful team of staff and volunteers including the trustees who have done amazing work for such little reward, the fantastic acts that have performed here and our loyal community who have been so supportive.”
Mr Birch added: “As other local authorities around the country set their budgets and look at the possibility of cutting all support for cultural infrastructure, we hope they can learn the lesson from Somerset. Taunton will be a poorer place culturally and economically without The Brewhouse.”