The council is placing its hopes in the transforming power of the Rose to steadily change the image of night life in the town away from young people spilling out of pubs and clubs.

It believes it is already bearing fruit with cafes and restaurants like Jamie Oliver's Italian opening near the theatre.

Council leader Derek Osbourne told the Surrey Comet that the recent university graduation day, when Sir David Attenborough joined 800 science graduates in the auditorium to receive a honorary doctorate, had brought "an estimated £40,000 into the local economy" as families shopped and ate in the town. The university plans to hold seven a year.

If the Rose was to close its doors, Kingston Council would still have to pay up to £470,000 for nothing, council chiefs estimated. Without rent from the theatre, its costs of insurance, maintenance, security and rates would cost £200,000 a year. The council would also have to pay back £250,000 to the university which it paid for use of studio space.

It also said it would lose the £20,000 estimated additional income from the Rose (formerly Drapers) car park. It said alternative uses of a building with little natural light were limited.

By 2011, the council will have invested nearly £13m in the theatre.