THE cost of Newport's landmark new theatre and arts centre will be £1 million more than the initial figure quoted to the council, the Argus has learned.

And now work on the building on the town's river front, initially set to cost £10 million, has been put back following the rise - understood to be as a result of an increase in costs. But Newport council says work on the centre will go ahead and it is still expected to open in two years' time.

More than £6 million of the cost of the centre is being met by the Arts Council for Wales, but the Argus understands that new quotes for the building are now over £1 million more than expected.

It is thought the cost of the building is now being reinvestigated, but if the new figure is adopted, the question will be where the extra funds will come from.

It is as yet unclear who will foot the bill for the rise, and how much of it would have to be met from council funds.

But it is believed the extra cost could be met by a mixture of cost-saving measures in the design of the building - including replacing rendering with cheaper cladding which would alter the exterior look of the new centre - and extra funding from the Arts Council and Newport council.

Councillors discussed the latest developments behind closed doors yesterday. Council leader Sir Harry Jones later told the Argus: "At the moment, as a consequence of cost factors that have come in from the tendering process, it is being addressed by the council in conjunction with the Arts Council in an effort to find a solution to enable us to go ahead with the scheme."

A spokeswoman for Newport council said that detailed negotiations with contractors are on-going and that they could not confirm an exact start date on site. "However, we do not anticipate any change to the opening date of the Theatre and Arts Centre which remains Autumn 2003," she said.

The project was originally conceived by Newport borough council in 1995, but it was put on hold due to uncertainty caused by local government reorganisation.

Two years later, it re-emerged with the first injection of Lottery cash for a feasibility study. The aim of the project has always been to provide a landmark building of architectural significance which will encourage and provide a balanced, wide ranging and well supported programme of arts events and activities for all sections of the community.