Equity, the actors' union, has suspended its instruction to members not to sign contracts with Coventry's Belgrade Theatre in protest at the axing of its education department because of council budget cuts.
The management board and the union have agreed a package which will salvage some of the work with schools, pioneered by Belgrade's theatre in education company 30 years ago, but 11 permanent staff will be made redundant by the end of March.
The theatre will half-fund an education officer for a year if the union's trust fund finds the rest and has agreed that Pounds 30,000 will be set aside for education projects using staff on fixed-term contracts. A spokesman for Equity said the union's council would decide whether to lift the ban at its March meeting.
Teachers, academics, writers and actors from the UK and overseas have expressed support for the theatre's education staff. A spokeswoman for the theatre was encouraged by the suspension of the "blacklist" as the directors feared that the company would have to close otherwise.