The future of a 90-year-old Scarborough theatre should be secured for the next two years, councillors recommend.
The Futurist theatre, on the resort's seafront, was built in 1921 and still stages concerts, shows and films.
The building is in need of repair and the borough council set up a task group to discuss its future.
The group's final report said a council subsidy of £60,000 should be approved so the theatre can continue to run until 2012.
In the meantime, advocates of a People's Trust will be given 12 months to come up with a business plan detailing how they could restore and run the theatre.
If such plans are not forthcoming or prove "unrealistic", the task group said the council would reserve the right to sell off the site for redevelopment in 2012, when markets are expected to have improved.
Councillor David Jeffels, the task group's chairman, said he hoped their recommendations would be rubber-stamped at the next meeting of the council's cabinet on 19 October.
He said the agreement would enable the Futurist's operator Barrie Stead, who has had his lease renewed for another two years, to continue to attract big-name acts to the town.
In December 1963 the Beatles performed at The Futurist and stars who have trodden the boards at the 2,000-seat theatre since include Morecambe and Wise, Shirley Bassey and Ken Dodd.