The Festival City Theatres Trust (FCTT), which runs the King’s and Festival theatres, is set to have its £769,000 council grant slashed to around £646,000 for 2016-17.
The cuts are being made as part of wider measures to save the city £141 million in total.
Critics today slammed the plans, stating that Edinburgh’s most prestigious theatres are being “punished for their success”.
Joyce McMillan, theatre critic for The Scotsman, said: “We understand the council is in a difficult position and has to make cuts, but this is on the back of Creative Scotland cuts to the Lyceum and Traverse theatres.
“The Trust has been doing so well and it seems increasingly that the whole funding attitude is that if you’re successful, then you’re being punished.
“There also seems to be an assumption that Edinburgh is a wealthy city and that theatres here can survive without public funding. It impoverishes Edinburgh [of the arts] and it’s a false economy.”
She added: “£123,000 is a drop in the ocean for the council and they achieve nothing in cutting it, yet it makes a huge difference to one of the city’s cultural beacons.”
The proposed cut in theatre payments, subject to public consultation, comes after the city council recently announced it had to launch a savings drive over the next four years. There are concerns that ticket prices will have to rise to make up the shortfall.
And officials also admitted the cuts could affect the range and diversity of shows staged at the theatres.
The Festival and King’s are two of Edinburgh’s best-loved venues. They have hosted shows including, Northern Ballet’s Romeo and Juliet, the National Theatre’s internationally-acclaimed War Horse and Dawn King’s stage adaptation of Brave New World.
Proposed reductions in funding also come after culture agency Creative Scotland last year announced it would slash grants to the Lyceum and Traverse theatres by 17.5 per cent and 11.1 per cent respectively.
City bosses stressed that funding plans for the King’s and Festival theatres had not been finalised and were subject to public consultation.
A city council spokeswoman said: “The budget process is in its very early stages, and it’s important to remember these are only proposals.
“Public feedback is key and several proposals were changed last year after Edinburgh’s residents gave us their views.
“The budget affects the public. We are willing to listen to these important voices. People can give feedback on the proposals online and have their say.”
Trust leaders declined to comment, stressing the plans were still at the proposal stage. Sources said they are “hopeful” reductions could be minimised.