Ever since the projector began rolling in February 1995, Harbour Lights Picture House has courted controversy, alternately rousing anger over its public cost and raising eyebrows at its risque film choices.

Yet the cinema quickly established itself as a beacon of culture for Southampton, its combination of innovative architecture, offbeat films and intimate auditoriums winning fans among those tired of watching big-budget flicks in warehouse-style movie theatres.

And when financial trouble forced the venue to close its doors briefly in 1999, supporters publicly campaigned for its return.

A decade later and Harbour Lights is under the financial spotlight once again as the council prepares to withdraw £25,000 of annual funding from the cinema complex as part of its “mini- budget” announced this week.

The subsidy cut is one of a series of savings to meet the Government’s austerity measures and tackle a £40m funding crisis.

Other proposed cuts in the three-year saving plan (due to go before the council’s Conservative Cabinet on Monday) include losing seven per cent of the council’s workforce and reductions in grants to areas such as children’s services.

A Southampton City Council spokesman said the Harbour Lights funding had been agreed as part of a contract to help establish the business and support running costs. “The cinema is now well established and in the current climate we feel it is no longer appropriate to be giving all that money to one business,” he said.

“The savings in this area are part of a series of cost-saving measures across the board.”

Harbour Lights manager Louise Scutts said the loss of funds was “disappointing” but did not put the future of the cinema in jeopardy, as some had feared.

“This won’t close us down, we don’t rely heavily on the council money and we have no plans to terminate the lease.

“It’s a great shame that the arts is always the first thing to go when times are hard. It’s an easy target when there are cuts to be made. But a city without arts and culture is a soulless place.

“This cinema brings an awful lot to Southampton and people travel from all over to see films that aren’t being screened anywhere else in the south.

“I want to reassure people that we’re still here despite the funding cut and, although the loss of council money is disappointing, there is no closure on the horizon.”

The news will come as a relief to worried cinemagoers, for whom the prospect of a Southampton without Harbour Lights is a sad one. Film critic and broadcaster Mark Komode, who lives in Brockenhurst, said: “Harbour Lights is a great cinema and it’s really important that it continues to thrive. It’s a wonderful space for watching films and for talks and I’ve been going there for years.

“It’s a fantastic cultural asset for Southampton.”

The mini-budget proposals will go before the council’s Conservative Cabinet on July 5 before going to full council for approval on July 14.