The Cabinet decided on Tuesday that the Abbey should stay where it is, but moving to O'Connell Street would be far better, writes Frank McDonald, Environment Editor.

The National Theatre on Ireland's main street - what could be more symmetrical than that? And it shouldn't be a pipe dream, either, because Dublin City Council is in the process of acquiring a large parcel of property on O'Connell Street that would more than meet the Abbey's needs.

The subject of a compulsory- purchase order, the parcel includes the former Carlton Cinema; the adjoining site, which has been derelict since a fire during Pope John Paul II's visit to Ireland, in September 1979; the office block where Dublin County Council did most of its land rezoning; and Dr Quirkey's Good Time Emporium.

The order also extends back across Moore Lane to Moore Street, where a titanic struggle was waged by the Carlton Group - chaired by Richard Quirke, owner of Dr Quirkey's - against Treasury Holdings over which of them would earn the right to develop a huge shopping mall and cinema complex on the site.

Though the Carlton Group won that bitter battle and has had an uncontested planning permission to develop the "Millennium Mall" since August 2000, nothing has happened. So the city council, which sees the scheme as an anchor for the rejuvenation of O'Connell Street, has now moved to acquire Carlton's entire holding.

Few would disagree that Upper O'Connell Street is dead; were it not for the Gresham Hotel and the Savoy Cinema, there would have been a funeral for it years ago. It has nothing like the number of pedestrians - or "footfalls" - as Lower O'Connell Street, because there is no magnet to draw them beyond Henry Street.

Since the closure of the Carlton, several years ago, the west side of Upper O'Connell Street has been particularly bleak, epitomised by the dereliction for more than two decades of the gap site next door. Which is why council officials are so anxious that it be redeveloped as soon as possible.

But a 100-metre-long Milan-style galleria shopping mall twice the size of the Ilac shopping centre, with a 15-screen multiplex and themed restaurants and bars, may no longer be a runner in these less swaggering economic times. So whoever develops the Carlton site will almost certainly have to recast the scheme to make it work.

The three-acre site would easily accommodate a new Abbey Theatre, with plenty of room for the Peacock, scene docks, rehearsal spaces and parking for 500 cars. The main auditorium could be located at first-floor level and above, most appropriately behind the Carlton's listed art-deco facade, with an entrance from the street.

The splendid high windows above the marquee, where the Carlton Grill was once located, could provide the frontispiece for a commodious lobby and bar, offering patrons a grandstand view over O'Connell Street. Such a prize would surely warrant relocating the retail concourse to the site next door.

Developing a new Abbey on the Carlton site would make a lot more sense than extending the existing theatre, the plan the Cabinet adopted on Tuesday. For a start, it would be hard to acquire property around Lower Abbey Street without a compulsory-purchase order - and the council does not have the power to make an order for cultural purposes.

The Carlton site, or whatever part of it would be required, could be handed to the Abbey on a plate, with the State reimbursing the council pro-rata for its acquisition.

Another major advantage is that the theatre could continue operating right up to the moment when its new premises are ready, with no loss of revenue.

Were the Abbey to examine relocating to O'Connell Street, it would have to take care not to get swallowed up by a retail complex, as the Derby Playhouse did. Assuming that it retained its identity, its presence would help to counteract the fast-food joints that have so infested the street.

With its main rival, the Gate, just up the way on Cavendish Row and the Hugh Lane Gallery at the top of Parnell Square, the arrival of the Abbey would create a cultural axis on the city's main thoroughfare. If the Ambassador was used for something more salubrious than a disco for adults in school uniforms, it would be even stronger.

No wonder Ben Barnes, the Abbey's artistic director, last week said that he regarded the O'Connell Street option as a "distinct possibility", following the debacle a year ago over its plans to relocate to Grand Canal Docks. That landed the theatre's board in deep water because the idea of decamping to the southside annoyed Bertie Ahern.

Barnes came to realise that the Abbey must examine any reasonable "locational solution" in the city centre - preferably in the Taoiseach's constituency, north of the Liffey. What the theatre needed, he said last week, was some funding from the Government to finance a thorough investigation of the options.

Instead, with no advance consultation, the Cabinet decided this week that the Abbey should be redeveloped on its existing site, vertically, horizontally or both. This would mean evacuating the premises for three full years and seeking temporary accommodation, perhaps in Belvedere College or Liberty Hall. It also raises the nightmare of having to negotiate with property owners in the vicinity, were the Abbey to extend southwards, towards Eden Quay, or eastwards, along Lower Abbey Street.

By failing to investigate the Carlton option, the Cabinet's decision represents muddled thinking on a massive scale.

Incredibly, the Abbey's board has not even seen two reports by the Office of Public Works on the theatre's future, commissioned by Síle de Valera, the Minister for Arts, Heritage, Gaeltacht and the Islands, and it was only yesterday afternoon that she finally outlined to the board her views on what should happen.

Were she to fund a feasibility study - and she should - it would be a drop in the ocean compared with the cost of building a new theatre complex. This could be as much as €75 million, not including site acquisition, which would in the case of, say, a quarter of the Carlton site probably amount to €12 million.

Building new theatres - even refurbishing existing ones - is expensive. Recent investment in Britain has included the Royal Court Theatre (£26 million sterling/€42.6 million), Sadler's Wells (£40 million/ €65.6 million) and the Royal Opera House (£300 million/€492 million), all of which are in London, and the Lowry Centre (£66 million/ $108 million), in Salford.

The Abbey reckons it needs 16,000 square metres of space, at roughly €5,000 per square metre, although it should be possible to pare this back were it to leap too far ahead of what the Government would be prepared to pay, even if this was topped up by private donors, as happened with the Millennium Wing of the National Gallery of Ireland.

More than a year ago, the Abbey effectively turned down €63.5 million from the Government to redevelop its existing site because Barnes and his board were so mesmerised by the prospect of getting a free site in the docklands.

Politically, it was a costly mistake - even though the money is still said to be on the table.

Not only would the docklands scheme have cost €127 million, but it would also have placed the National Theatre alongside the luxury apartments and, no doubt, cappuccino bars that will gather around Grand Canal Docks. Showing no civic responsibility, it would have been a denial of the legacy of W.B. Yeats and Lady Gregory.

There can be no doubt, however, that the Abbey desperately needs investment - and not just on health-and-safety grounds. The existing building fails actors, directors and audiences alike.

Even with the 1988 portico, it has never worked architecturally, and the backstage facilities are deplorably inadequate for a national theatre.

The Cabinet's decision may be seen as purely political, with an eye to the general election. A proper feasibility study still needs to be undertaken, however, and who better to do it than Richard Wakely, after he steps down as the Abbey's general manager at the end of March? His background is in urban geography.