The Arts Council has said it is extremely angry about what it called the mismanagement of public funds at the Abbey Theatre.

The statement followed a meeting at which the Council considered an independent financial report about the Abbey's finances

The Council is to meet the operational costs at the national theatre until the end of August, but wants to see a new company and a new board.

The council had already said it would release extra funding to the troubled national theatre after the meeting.

It had asked the theatre for a detailed briefing on the trading losses for the first six months of this year, which were not part of the investigation by KMPG, which reported last week.

The Board of the Abbey accepted that the theatre was facing a financial crisis after that report revealed the Abbey ran up a loss of €1.85m in 2004.

The present board of the Abbey Theatre is to stand aside when a complete restructuring of the company takes place.