Since the 1960s, the Pegasus Theatre has been quietly building a reputation for experimental, avant-garde pieces of drama, and as being a place for young people to gain experience of all aspects of theatre work.

Fifteen full-time staff are supplemented by a pool of 26 paid part-timers and 26 mainly young volunteers.

In recent years, the theatre based in Magdalen Road, East Oxford, has struggled with inadequate buildings that have stymied its development.

All this is about to change, however. In the summer of 2008, bulldozers will be moving in to flatten most of the site and by 2010, a brand new £6.3m building will be in place, designed by award-winning architects Feilden Clegg Bradley.

Jacqueline Cutting, head of development said: "At the moment we are actually in several buildings, including the old rehearsal space and workshop that used to be a catering facility for local schools.

"There are cracks in the roof, plants are growing through the cracks and the wind and rain come in. Former administration rooms have been closed, declared unsafe and during high winds no-one is allowed to use the rehearsal room because the roof might rip off."

She added that at the moment the administration offices are around the corner, hardly an ideal situation.

The new building will incorporate administration, rehearsal space and workshops behind the current theatre space, while the foyer is also to be expanded.

What won't be changing is the layout of the theatre itself, nor will the number of seats increase from the current 120.

"We found that a lot of the professional companies, young people from the youth theatre and the audience, really love that intimate space," Ms Cutting said.

"At the end of shows, particularly those involving kids and families, some of the audience can go down on stage and mingle with the performers.

"The frontage will be clearer, so people can find us more easily and the door spaces will make it much easier for people to go in and out. The theatre will be refurbished and a new wing added to it."

New seating and modern production facilities, such as lighting, sound and heating are also being added.

Meanwhile, a modern café above the foyer is planned which, as well as providing a focal point for staff and theatre users, will hopefully become used by the local community too.

Of course raising the money for this ambitious development is a major task in itself.

Much of the total to date has come from grants including £2.7m from Arts Council England/Lottery, £1.2m from Oxfordshire County Council and £300,000 from Oxford City Council.

A further £300k has been previously raised meaning that £4.5m is now in place - more than 70 per cent of the total with major efforts now underway to raise the rest.

This will have to come from outside as much of the theatre's current £545,000 annual turnover is also subsidised by grants.

The theatre plays host to professional and amateur groups and is perhaps best known for being the home of the Oxford Youth Theatre.

"There are 500 members and a further 800 young participants, aged between 6 and 19, who come to other events including one-off workshops," Ms Cutting said.

However, the Pegasus also has an adult drama group and provides an umbrella for organisations such as Arpan, a South Indian classical dance troupe as well as several specialist organisations.

Ms Cutting explained: "Every week, there's a group made up of people who are physically and/or learning disabled and their carers who come to the theatre and spend two hours devising dance and drama pieces.

"The tutors are all trained professionals, so the quality of work is exceptionally high. Both the audience and critics rate a lot of what goes on here."

One of the theatre's major aims is to help participants build up confidence and self-esteem by operating within a safe environment, as well as learning technical, dramatic or dance skills depending on the niche that they are in.

"It's not really about acting, it's more about people learning how to get in touch with their own sense of creativity. It's also about people working together in ensembles and groups rather than individually."

More than 70 per cent of the funding for the building has been raised. Ms Cutting has been brought in to drum up the remaining £1.8m.

"Although our initial focus is on making sure the new theatre complex gets built, we're also going to be looking longer term to building up the theatre's revenue needs," she said.

"We're looking to trusts and foundations, local firms and corporate donors and also to members of the local community for funding."

Ms Cutting gained fundraising experience during ten years working in the Oxfam's appeals department.

"One of the big differences here is that we're able to show people exactly what the need is and the type of work carried out in the space," she explained.

"It's a fantastic training ground for people who are involved in the participatory arts, as well as being something rather different and special for members of the audience."

With Feilden Clegg Bradley's inspiring design, which will incorporate state-of-the-art environmental ideas, East Oxford looks set to become home to a prestigious and very special building complex, one that will finally allow the Pegasus Theatre to fully spread its wings.

n Contact: Pegasus Theatre 01865 792209. www.pegasustheatre.org.uk