LONDON -- The Royal Shakespeare Company, which had two smash hits with "Les Miserables" and "Nicholas Nickleby," called it curtains in London on Saturday in a cost-cutting move highlighting tough times for the British arts.

Following its sellout evening performance of the play "Singer," the company closed its two London theaters at the Barbican Center until March. It will continue its season in two theaters at Stratford-Upon-Avon.

"With your help and God willing, we'll be back," the company's artistic director, Terry Hands, told the Barbican audience.

It was the first time the state-subsidized company has taken such a step. The event was greeted with a mixture of sadness as well as applause for the company's determination.

"Let's lift a glass to, if you like, the future and our return," Hands told the audience before they went out to the lobby to join cast members for one last drink in London this year.

The move is expected to save $2.53 million for the company, now $5.85 million in debt.

The company is the largest of the many theater organizations around Britain to be fighting for survival in today's cost-cutting, recessionary climate.

This past Monday, Vanessa Redgrave, Glenda Jackson and Dame Peggy Ashcroft were among the British stars to launch a nationwide campaign at London's Albery Theatre to spotlight the financial woes of the theater industry.

The Shakespeare company receives annual subsidies of $11.8 million. It says it needs $19.3 million to be in the black.

Hands consistently argued that the company's grant has kept pace neither with inflation, running at 10.9 percent, nor with the specific recommendations of an independent report saying the company was under-funded.

Annual worldwide revenue from the musical "Les Miserables," which opened at the Barbican in October 1984, brings the company nearly $2 million a year, but Hands points out that the show won't run forever.

Amid widespread sadness at the company's closure in London -- depriving the city of up to six plays -- is some speculation that the company has, in part, been its own worst enemy.

Its case "is not helped by espousing the palpably second-rate," David Lister wrote in the Independent of "Moscow Gold," the company's new play about Soviet President Mikhail Gorbachev. Howard Brenton and Tariq Ali's play, a satire with a cast of 33, opened Sept. 26 to bad reviews and has performed poorly at the box offices.

"Moscow Gold" was one of three new company plays to receive blistering reviews in London this year. Only Peter Flannery's "Singer," starring Antony Sher as a concentration camp survivor turned London slumlord, won acclaim from critics and audiences, playing to 99 percent capacity in the 1,162-seat main auditorium.