It’s been some time a-coming, but the Cambridge Arts Theatre has now unveiled its plans to expand the theatre. Act Two, as the development is called, will increase the frontage, add extra foyer, bar and eating spaces, excavate the basement area to make an informal and airy meeting place and – crucially – provide a new studio theatre at what is at the moment the restaurant level.

This would facilitate the staging of new and experimental work (for which the main 1930s auditorium is not always suited) as well as permitting the Arts Theatre to generate its own productions – latterly just an annual musical and the pantomime at Christmas – and send these out on tour to other similar-sized venues.

Announcing Act Two in the imposing surroundings of King’s College Chapel, chief executive Dave Murphy paid tribute to his predecessors’ vision for the theatre and its place within the wider context of Cambridge’s cultural life, both that of the university and of the wider city.

The chosen architectural practice is Burrell Foley Fischer LLP; partner Mark Foley, who was in charge of the conversion of London’s Almeida Theatre and the expansion of Sheffield’s Crucible, explained the plans in detail. They involve buying-out the Arts Theatre’s current lease and acquiring two neighbouring properties as well as attic-level rooms currently used by King’s as student accommodation.

A glass-fronted façade would then extend along Peas Hill, showcasing day-long activities inside. An open double staircase running parallel to the existing auditorium back wall would lead to the various open-plan circulation areas on three levels. There would also a larger box office space. The roof itself will be glazed, letting light flood into the whole building whatever the weather outside. The new studio theatre would have a thrust stage with its audience sitting in raked stalls and balcony to provide a feeling of intimacy.

All this will not be cheap to achieve. £12 million is the sum cited by Murphy, of which £700,000 has already been raised. Previous refurbishment between 1993 and 1996 closed the theatre and cost £2 million. Murphy pledges that the new development – due (funds permitting) to start in 2013 and be completed by 2015 – will take place without closing the theatre and thus dissipating its loyal audience.

Cambridge has wealthy individuals as well as institutions with connexions reaching far beyond the city itself. The Arts Theatre has shown itself as a production-receiving playhouse to be financially apt, generating a surplus of income over expenditure in spite of the only subsidy received being a Cambridge City Council grant. A solvent regional theatre is quite a rarity in the 21st century. It will be fascinating to follow this bold initiative.