THE death notice was as premature as Mark Twain's infamous obituary. For a theatre given the black spot last spring in a piece of Sunday broadsheet scare-mongering over potential closures, York Theatre Royal is in vibrant health.

In the foyer, the new Alpine wooden flooring sets off the new coffee tables, sofas and bean bags (suddenly and unexpectedly fashionable again) as the retro combines with the ultra-modern.

The sign for the new Studio space in the old paint workshop is shining out its neon welcome; new chief executive Ludo Keston arrives next month, and this week three new companies were assembled to start work on the autumn ensemble season in the main house, the debut Studio triple bill and next month's Youth Project. Oh, and the summer repertory production, The Three Musketeers, is in full swing.

The Studio will play a key role in the theatre's expansionist plan an it is still taking shape in readiness for next month's inaugural show and is now being used for rehearsals for the Theatre Royal Youth Project, a production of The Chrysalids to be directed by Jill Adamson, director of Youth Theatre Yorkshire.

"It has taken four and a half years to put the Studio project together," says artistic director Damian Cruden, relieved at its imminent opening.

It will be an experimental space in every sense, initially being run on a two-year trial basis.

"We have to see how it works within the physical set-up of the theatre and in terms of our programming," says Damian.

"We hope to have live music and stand-up comedy in there, and we see it as a broad and varied space which will be more flexible than the main auditorium. The Studio will become a space in which many things can happen 'on top' of each other."

The Studio will be a voyage of discovery. "The two-year period will allow us to see what work we should be doing in there: how much professional theatre, how much amateur theatre, how much youth theatre; live music; comedy; how much it should have a non-theatre role supporting community projects," says Damian.

"The Studio is moving towards the notion of having a centre for the arts in the heart of York, and it would make sense for the Theatre Royal to be the place to do that."

The Studio season of John Godber's Happy Jack, Arthur Smith's Live Bed Show and Enda Walsh's Disco Pigs will run from September 5 to November 3, each play a two-hander to be performed by John Kirk and Lucy Chalkley. The season will mark another first: the directing debut of Tim Welton, a regular member of the rep in York.

"The Studio is new, so I thought 'let's do something new and have someone new in charge'," says Damian. "Having worked with Tim, from his acting I know he has the maturity, he has the leadership qualities and he has a lively mind in terms of vision outside theatre performance. He has clear thinking and good discipline, and you also can't ignore that he's a good man, very warm, personable; people get on with him."

Tim Welton's new role this autumn is all part of the theatre making the most of the forces at its disposal. "We have a responsibility to the artists we work with to encourage them to develop. You don't say 'Oh, acting is all they can do'; you have to allow them to expand.

"At the end of the day, with any enterprise involving an employer and an employee, you can't just suck things out of them. There has to be room for personal development."

Damian Cruden sounds as excited and full of hope as any football league manager at this time of year: the pre-season.

"The Theatre Royal is an industrious place to be in at the moment, and that's what we are: an industry, and it's a lovely feeling to be making theatre," he says. "I do think there's a perception that the Theatre Royal is a changing place, although there's still a problem getting people out into the city centre at night, and we do need to encourage people to do that, to come out and play and get to know each other.

"Our central aim is to make the theatre a vibrant building, so that everyone is clear that the Theatre Royal is their building and not the Queen's. It's their mental gymnasium and everyone can work out in it.

"In turn, we need to keep on diversifying our programme and have to work on de-mystifying the theatre."