The chief executive of Kingston's cash-strapped Rose Theatre has announced he will step down next year.

David Fletcher’s decision to say farewell to the theatre ends eight years at the helm of the controversial arts venue.

During his tenure, Mr Fletcher saw the theatre open to acclaim in 2008 and watch it stay open despite commercial and financial setbacks.

When the theatre was on the brink of closure in December 2008 he was part of the team that persuaded Kingston Council to approve a £600,000 a year subsidy, reduced to £500,000 earlier this year.

His replacement Robert O’Dowd resigned three months ago from the helm of a £35m arts centre being built in north Wales.

He will start working alongside Mr Fletcher immediately.

The Rose's artistic director Stephen Unwin said: "We will all miss David Fletcher enormously. "But I’m thrilled that Robert O’Dowd is going to join us as chief executive and I very much look forward to working with him.

"The Rose is going from strength to strength and I know that he will play a hugely important role in helping the Rose realise its tremendous potential."

Anthony Simonds-Gooding, who was brought on board as chairman in 2009 to rescue the ailing theatre, said: “I am confident that Robert will broaden the theatre’s horizons and attract new revenues.

“I am particularly excited that Stephen Unwin will now be able to dedicate his energies where he is so brilliant – as the Rose’s artistic director.

“I am confident that these two together will promote the Rose to a new level of performance and popularity.

“We will all miss David Fletcher who has been central to the theatre’s achievements over the past eight years. Happily he is not leaving us until May 2012."

Mr O’Dowd stood down from Bangor University’s Pontio centre in August before its planned opening next year.

Before that Mr O’Dowd was a director of Classic FM and chief executive of Real Health UK.

He said: “I am delighted to be joining the Rose Theatre as chief executive to build on the excellent work that Stephen and David have been doing.

“Since the opening in 2008, and thanks to the support of the Royal Borough of Kingston upon Thames and Kingston University, the Rose has received great critical acclaim.

“The challenge is to ensure that this creative excellence leads to a long-term sustainable future and I relish the opportunity of working with Stephen and the team on delivering this.”

Mr Fletcher was forced to tell staff earlier this year many of them would lose their jobs after the council subsidy was reduced and the Arts Council turned down a funding bid.

The council funding for the theatre has proved controversial ever since the theatre was bailed out against a promise by Liberal Democrat council leader Derek Osbourne to close the public purse strings.

Disability campaigners have criticised funding for the theatre at a time when elderly and disabled people in Kingston were facing a price hike for basic services.

Nick Kilby, a former Conservative councillor who called for the entire board and management team of the Rose to resign earlier this year, said: "I think he is an extremely competent, capable and decent man from a finance point of view.

"He struggled with the business plan and the shape of the business and the operation.

"I’m sure it is the right time for him to find a new avenue and deservedly so for the loyalty he has shown the Rose."

Howard Jones, leader of Kingston's Conservative party, said: “He has been there since the start and always fought its corner very hard. I wonder why he is going."