Rafael Vinoly designed the glass-fronted theatre

Councillors have decided to finally approve financial plans for the �47m scheme which will form the centre piece of the Cultural Quarter.

Concerns had been raised about spiralling costs. The scheme had looked in doubt, but a fixed price has been agreed for 90% of the project.

It was approved at a private meeting on Monday night after previous fears that rising costs could kill the scheme.

'Iconic building'

The new glass-fronted theatre, the costs of which have doubled in recent years, will replace the Haymarket Theatre and help start a regeneration of the St George's area of the city centre.

Laura Dyer, executive director of Arts Council England, said: "This is fantastic news for Leicester and the East Midlands.

"Not only will it be an iconic building hosting world-class performing arts for the whole community, but it is also such a critical tool in the regeneration of Leicester as a whole.

"We are so pleased that this lottery investment is going to bring such huge benefit to all."

Labour had kicked off the scheme in 2002, but it has twice been ousted by a Tory and Lib Dem alliance. All parties now back the scheme.