The report says the site should be redeveloped for commercial use because the centre loses too much money and has no prospect of making a profit.

It recommends making plans to find new homes for community groups and charities that currently use it and drawing up a business plan to cut losses in the meantime.

There would also be a public consultation on the future of the site.

Last year the Warwick District Council spent £557,508 on subsidising the venue.

Cllr Michael Coker (Con, Kenilworth Abbey) chaired the group that produced the report.

He said: "Is it right to spend taxpayers' money on putting on professional shows?

"We came to the conclusion that it is not.

"There is a new manager - if he were able to turn it around, that would be wonderful, but it seems unlikely."

But fellow Tory Cllr Sue Gallagher (Leek Wootton), who is responsible for cultural issues, said: "I want to keep it exactly the same - we just need to lose less money than we are losing at the moment and I think that's possible."

She added: "Leamington needs a theatre - it's a case of use it or lose it.

"It would be a disaster if we lost it because we would never get it back."

Liberal Democrat spokesman Cllr Alan Boad (Leamington Crown) also remains optimistic.

He said: "If there is a big demand from the community that the Spa Centre needs to remain, then the Spa Centre will need to remain.

"It's far to early to make any decisions about whether it should close.

"The conversation with the public is only just starting."

Although Labour spokesman Cllr Bob Crowther (Leamington Clarendon) agreed that there should be a public consultation, he said: "The question arises whether the costs of maintaining the building are justifiable if there are other ways of doing the same thing.

"The building is not as adaptable as a building designed now would be."

If the group's recommendations are approved, investigations would begin into finding new uses for the building in Newbold Terrace.

The council would also consult with the non-commercial groups which currently use the centre - including Spa Opera, Side By Side and the National Blood Service - to find suitable alternative venues.

The council's executive will discuss the Spa Centre when it meets at Leamington town hall on Wednsday at 6pm.