The 102-year-old Tollcross landmark has long been in need of repair and the new city council has promised to make drawing up plans to save it “a top priority”.

But the theatre’s chief executive, John Stalker, warned today its days could soon be numbered unless the attempt was successful. He said: “With trepidation, we approach our licensing inspection every year, and one year very soon the building will fail that.

Five years ago we said we needed the improvements and the funding package was not there. We are now five years further down that line.” The ageing structure was built in 1905 and not only needs to be modernised in terms of disabled access but requires a raft of internal renovation. Mr Stalker said the stage was in a poor state of repair, while lighting and other facilities needed significant upgrading.

The changing rooms and audience seats also require a revamp, as do the cafe and bar. “It needs fundamental and major refurbishments, and we’ve been saying that now for a number of years,” added Mr Stalker. “It is becoming increasingly hard to maintain and despite being a popular venue it is increasingly difficult to meet audience expectation.

Every year it becomes harder to run. It is the people’s palace of Edinburgh and loved by generations of people in the city. We want to get a funding package to make it fit for the next 50 years. But we are working hard with the council on this and not just doing it on a wing and a prayer.” The results of a council feasibility study now being carried out are expected by the end of the year. At that point, bids are likely to be considered for Lottery and other forms of funding, as well as exploring possible sponsorship.

A figure of £20 million has previously been placed on total refurbishment, an amount the previous Labour administration said they were unable to come up with. The new council leader, Jenny Dawe said she was determined to do what she could to secure the future of the theatre, which she acknowledged was at risk in the coming years.

She said: “Nobody wants to see the King’s close down but that is the reality of the situation unless refurbishments can be carried out. We know the Festival City Theatres trust had a National Lottery bid turned down a few years ago but we need to look seriously at another funding package as soon as possible. The first step is to get an updated feasibility study under way, which will tell us what needs to be done and how much it will cost.”

The local authority is already in the midst of the second phase of a multi-million pound refurbishment of the Usher Hall. The costs of that project have soared by more than £6m in the last two years and the new-look venue is to be forced to close for almost a year to ensure it is finished by the summer of 2009.