Belfast's leading arts venues are amazed by the Arts Council of Northern Ireland's recent funding decisions. Their proposals have been rejected, but a new £3 million city-centre venue has got the all-clear. What's going on?, asks Roisin Ingle

The stage was always set for disappointment, with three major applications vying for attention on the boardroom table of the Arts Council of Northern Ireland. But when proposals from the Grand Opera House, Crescent Arts Centre and Old Museum Arts Centre (OMAC) were all turned down last month, the main players in Belfast were left, jaws dropping, in the wings. "Have you ever rattled a wasps' nest?" says Anne McReynolds of OMAC. "Well, that is what are doing."

Confused, shocked and disappointed, three of the most established arts organisations in the city have spent the past few weeks trying to make sense of the council's decision.

OMAC, which hosts small drama, comedy and music productions, hoped to be given the go-ahead to be the lead organisation in a new city-centre arts facility. This "landmark" arts building will form part of city's bid to be Cultural Capital of Europe for 2008. It was turned down because its application was "of insufficient business quality".

Some £3 million sterling was dedicated to the proposed new centre on a site in the Cathedral Quarter area and £100,000 set aside to fund a new proposal for its development.

Crescent Arts Centre had opted out of any involvement in the new facility, as it was unwilling to move from its prime location in the university district. It had applied for £2.5 million sterling for much-needed development of its existing building. This was rejected because the application was "of low strategic priority" and had "inadequate partnership funding".

The Grand Opera House, meanwhile, was seeking funds to build a medium-sized theatre beside its successful venue. This, too, was turned down, although up to £2 million sterling has been earmarked to refurbish the theatre.

To the bemusement of those affected, Róisín McDonough, the chief executive of the Arts Council of Northern Ireland, insisted that the news should be seen in a positive light, because the council was helping the three organisations "to take the next step in the realisation of their plans".

"There has been shock and anger and confusion," says McReynolds. "We are unhappy that what should have been a good-news story has seen the arts council insult all of us and disparage the work of the OMAC and the Crescent Arts Centre. We did not create our business plans in isolation; senior arts-council officers worked closely with us . . . We knew it wasn't the perfect document, but we believed it to be acceptable."

According to the council, OMAC will still be one of the main groups involved in the new centre. This has done little to appease McReynolds and her team, who had a tough job persuading an arts community that is disillusioned with the council to get involved with the proposal.

"There I was, convincing people to come with me, telling them that this centre wasn't just another thing that wasn't going to happen, and then the council send out a press release saying, you are crap, or you are crap but we still want you to work with us," she says.

Morale at the Grand Opera House took a blow, but staff have not given up on their proposal, despite the announcement that their plans for a new theatre were not up to scratch. "It is quite bizarre," says Derek Nicholls, the theatre's director.

"One month after the announcement, we are still none the wiser. The council had been working closely with us with regard to the application, so it was a shock . . . There was a rather snooty line about it being weak in business terms. Some guidance would have been helpful."

Like many in the city's arts sector, Nicholls feels other agendas may be at play. "Either there is another preferred site for such a theatre or the council are worried about adding to venue stock. It is cowardly to believe that audiences can't be built. We need some vision here," he says.

At Crescent Arts Centre, home to activities as diverse as salsa dancing, visual art and guitar lessons, there is similar disquiet. "We were personally very upset," says Julian Watson, a board member. "We have questions about the way the whole process has been administered and are also, naturally, disappointed at being turned down."

The board is considering asking for a judicial review of the decision. "We were liaising with the arts council and given advice that we were on the right track. In the end, we were turned down on 'low strategic priority' and 'inadequate partnership funding'. That is ambiguous enough for us to wonder what exactly is going on."

One of the main causes for concern is the perceived lack of direction in the new venue. There is no indication of who will run it, what community it will serve or what activities it will host. "The arts council have given £3 million, but to what?" asks McReynolds.

Others are dismayed at the idea that the council's recent decision suggests they are trying to shoehorn most of the existing arts providers into one facility. "That would be making the arts homogenous, which is bizarre," says one arts worker.

DAMIAN Smyth, the arts council's spokesman, confirms that a consultancy process is under way that will answer these questions and look at the economic feasibility of the Cathedral Quarter project - a task some feel has already been completed by OMAC, with its rejected business plan.

"The idea has been around a long time," he says. "This is the first funding that has been put towards the new purpose-built centre, and the allocation is tantamount to saying that it will happen." Smyth says the council is trying to move people into a new era, in which the development of the Odyssey and the Waterfront Hall means audience patterns are shifting. "We are going through a development period. The arts council has to look ahead, and we are taking the lead by saying there has to be a city-centre facility."

With a rapidly diminishing pot of £9 million sterling in lottery funds set aside by the arts council for major capital projects, there is little room to manoeuvre.

"But you have to ask questions when everybody in every venue is unhappy," says a source involved in arts funding. "They need these people. If they don't keep them onside, there will be big trouble. There is not enough money to go around? Well, find the money."

When asked about the deteriorating nature of the relationship between the council and its clients, and their growing sense of alienation, Smyth says it is not for the council to act as a nanny to those making applications. He points to the annual funding some Belfast venues receive from the organisation.

"I wish I was alienated to the tune of £90,000 a year, like the Crescent Arts Centre, or alienated to the tune of £180,000, like OMAC," he says. "The reality is that there is more pressure than ever on public funding; for example, the crisis in public health makes it more difficult to make the case than before. Here is an arts centre, but here is a hospital . . . That is the way it is now."

There are different perceptions of what an arts centre is, and that needs to be looked at, he says. "The way the council is viewing it, the arts centre is a place for artists, for creativity, for those involved in community arts, and we hope it is as much a place for Joe and Josephine Soap as for the established arts practitioners . . . We want to increase the sense of ownership of the arts. It is actually quite a radical agenda."

Radical or not, it will take time to heal the rift between an arts community whose nose has been put out of joint and an arts council intent on dramatically reshaping that community.

"I believe there is a far more effective way of supporting culture," says Julian Watson of Crescent Arts Centre. "There could be a hell of a lot more support and collaboration, instead of facelessbureaucrats in an uneasy, disjointed arts council.

"We hear all this talk about moving to 2008, at a time when Belfast is bidding to be a capital of culture, but it seems to us that this means ignoring culture that already exists in favour of a fantasy."

MOST people in the Belfast arts community agree that if there is to be a new city-centre arts space, the people behind OMAC should be closely involved. Formed more than 10 years ago, the centre accommodates a wide range of smaller-scale live events. Its programme includes education and outreach programmes, and the venue is a hothouse for emerging talent. Whatever happens, OMAC will have to move, as its listed building does not comply with disability legislation to be introduced next year. OMAC staff hoped their new home would be the new city-centre arts facility, but with the Arts Council of Northern Ireland's rejection of the centre's plan, this is now uncertain.

NOW owned and maintained by Belfast City Council, the Ulster Hall Company was formed in 1859. Rock and pop groups from U2 to a fledgling Oasis have graced its stage over the years, but the hall is just as likely to host choir practice or gospel services. Above the tiny foyer, the Group Theatre will be a victim of expansion of the woefully inadequate front-of-house facilities. One option may be for the theatre to relocate to the proposed city-centre arts venue, but there is no definite strategy as yet.

CELEBRATING its 50th anniversary this year, the Lyric has been to the forefront in presenting the best in new writing, contemporary Irish drama and international classics. The theatre has been on Ridgeway Street since 1968, staging world premieres of works by Martin Lynch, Gary Mitchell and Marie Jones. After a couple of tough financial years, the theatre is slowly getting back on its feet, but it will need to raise more than £10 million sterling for redevelopment to ensure that its central place in the city's theatrical landscape continues for another 50 years.

THE building may be in need of massive restoration - plans for which were dealt a blow when the Arts Council of Northern Ireland rejected the centre's funding application - but there is no doubting the quality and diversity of the programme on offer at this site on University Road. Established more than 15 years ago, Crescent started small, but 60,000 people now pass through its doors each year. From a programme of 70 classes, children can learn to dance or play chess; older people study everything from popular guitar and ballet to break-dancing and jazz. Crescent is also home to the Fenderesky Gallery and the Between the Lines literary festival, which runs from March 14th.

OPENED in 1895, the Grand Opera House has been packing them in since its Victorian heyday, with a crowd-pleasing mix of drama, opera and pantomime. Last month, the Arts Council of Northern Ireland rejected a management plan to build a medium-sized theatre on an adjacent site. It's a far cry from the 1970s, when the council assured the theatre's survival by funding a huge restoration project. The theatre, which is the main Belfast venue for big-budget West End shows, again requires considerable refurbishment of its front-of-house and backstage facilities, improvements for which the council has set aside £2 million sterling.