Artistic director of the pioneering Tricycle Theatre, Nicolas Kent, will step down next March following a mauling of the Kilburn theatre’s financial grants.

He told the Ham&High that the 40 per cent cut in the theatre’s budget has forced him to quit after 27 years at the helm.

The Victorian 235-seater hall will have to fall back on its reserves this year as �348,000 cuts from the Arts Council and �56,000 from London Councils grants begin to bite.

He said: “This has made maintaining the level and quality of work for which we have become known a hugely difficult challenge, and one perhaps more suited to new hands.”

Mr Kent added that 2012-13 will be a tough year for the theatre.

After taking over the running of the theatre in 1984 four years after its inception, Mr Kent, 66, steered the theatre to wide acclaim with its political and tribunal plays like the dramatisation of the Hutton inquiry.

The theatre’s success has continued in recent times and later this year, The 39 Steps and Broken Glass – both originally from the Kilburn High Road theatre – will play in the West End.

In a parting shot, Mr Kent attacked the government’s belief that philanthropy will fill the breach left by public funding.

He has argued that while the National Theatre might be able to attract the necessary funding, smaller, less glamorous, theatres such as the Tricycle will struggle to fill the gap.

Although it is farewell to Mr Kent it is not goodbye and he hopes to direct and produce plays in the future.

He said: “Leaving after so many years is both sad and daunting, but I look forward to finding new challenges directing and producing on stage as well as in different media, and or working on arts and community projects – by harnessing whatever talents I have in different ways.”