Wales may struggle to develop actors like Michael Sheen in the future amid huge arts cuts, a theatre boss fears.

Wales Millennium Centre’s artistic director Graeme Farrow said there was “panic” throughout the industry.

“We’ve got Michael Sheen in a big show next May about Nye Bevan and I’m genuinely thinking ‘how are we going to sustain talent like that into the future in Wales?’,” he said.

The Welsh government said it recognised the value of the cultural sector.

The head of Wales’ flagship theatre does not give many interviews, but believes it is time to speak out about the “crisis” facing the arts.

Sitting in front of the Wales Millennium Centre’s famous lettered windows, Mr Farrow said the cost of “just opening the doors and running this facility” has gone up by £1m per year since 2019.

In its 2023-24 budget, the Welsh government committed £33.3m to the Arts Council of Wales, which distributes public money.

That equates to less than 0.2% of the government’s total budget.

Mr Farrow told the BBC’s Politics Wales his message to the Welsh government was “the crisis is bigger than you’ve acknowledged” and a 10% boost in arts funding would “steady the ships”.

Wales Millennium Centre has recently played host to Branwen, “an epic Welsh-language musical,” but that is the type of show Mr Farrow fears will not exist in future.

“People are going to be making less shows, there’s going to be less opportunities for young people to be creative and gain skills, there’s going to be less opportunities for people to participate in the arts, and gradually that’s going to erode what the culture of the nation is.”

He said the industry was at the point of being unsustainable due to having to do “more with less”.

Freelance theatre director and producer Yvonne Murphy said it came down to “where we place the importance of arts and culture in Wales”.

“Less than 1% of the annual budget is not enough when you think of the return on that investment,” she added.

National Theatre Wales saw its grant from the Arts of Council of Wales scrapped in September and chief executive Lorne Campbell has grave concerns for the industry’s future.

He said he recently spoke to the chief executive of one of Wales’ larger organisations who had been forced to do front-of-house shifts because they could not afford to pay staff to take tickets from customers.

“That’s how some of our larger venues are managing to keep their doors open, and you can do that for a bit, it’s not a plan,” he added.

“The evidence base for the impact the arts have into education, into health and also into the bottom line is abundantly clear.”

Plaid Cymru’s culture spokeswoman Heledd Fychan said there was no “champion” for the arts in Welsh government.

“I would want to see the deputy minister really engage with the sector, understand it and champion it because we desperately need that vision and direction and support,” she added.

The Welsh government said: “We are committed to working with the cultural sector during these challenging times and recognise the valuable contribution culture makes to the economy and wellbeing of people in Wales.”

It added it had provided £1m over two financial years due to cost increases in the sector.