As the Royal Court ends its pioneering West End residencies and prepares to return to its refurbished Sloane Square home, Nick Smurthwaite talks to executive director Vikki Heywood about construction headaches and artistic principles....

When the Royal Court reopens Sloane Square to the public in January with Conor McPherson's first play since The Weir - some three years after closing it for reconstruction - it will have run up a bill in excess of £25 million, making it the costliest fringe venue in the world.

'It's been one of the most complicated construction jobs in London,' says the Court's executive director Vikki Heywood. 'The site is so restricted, what with the main sewer being five feet away from the back wall of the theatre and having a time limit on each day's work because there are people living on either side of the theatre. Also the local authority would not permit any rooftop extension, so we had to go underground.'

These subterranean excavations have produced a smart new restaurant and bar on the site of a long-defunct public toilet under Sloane Square, reached by a short passage from the theatre. Creating this passage under a busy main road proved much harder than anyone expected, as did maintaining the theatre's ornate Victorian facade while building work was in progress a few feet away. To cap it all, the heavy downpours of August caused extensive flooding in the basement, the damage to which has to be put right before the public can be allowed in.

'To get the job finished, it's been not so much a case of climbing Everest as scaling the entire Himalayas,' joked Heywood. 'I don't think any of us realised quite how stressful it was going to be.'

And the problems were by no means all structural. Last year, in their urgency to raise a further £3million on top of the £19m from the National Lottery, the Court came close to agreeing to the theatre being renamed the Royal Court Jerwood Theatre at the behest of their benefactors, the Jerwood Foundation. Within hours of this becoming known, the playwright David Hare - one of the Court's more distinguished discoveries - had issued a statement calling it 'absurd and preposterous' that a theatre with a century-old radical tradition should be so compromised.

Jerwood eventually settled for interior rather than exterior billing - the two auditoria will be known as the Jerwood Theatre Downstairs and the Jerwood Theatre Upstairs - while outside the facade will still proclaim the pure, unadulterated Royal Court Theatre.

'Ideally, I know a lot of people would have preferred us to find the money without any strings attached,' says Heywood, 'but in this day and age that sort of money simply isn't available from the private sector on those sort of terms. The Jerwood Foundation has always been very supportive of new and difficult work by young writers which is what the Royal Court is all about. I don't think anyone can say we've been compromised by this decision.'

However, there remains an idealistic body of opinion that feels uneasy about the Royal Court being beholden to private funding bodies. It could be worse, of course. At least the Jerwood is a charitable foundation, without any vested interests, dedicated to supporting the arts. But you can't help wondering how long it will be before the Court is forced to turn to business sponsorship to supplement its inadequate revenue funding.

One unexpected source of income has been the huge success of The Weir at the Duke of York's, one of two West End theatres successfully colonised by the Court during the period of reconstruction. Conor McPherson's haunting play has been running for a year now, in addition to a Broadway transfer and a UK tour. The radical presence of the Royal Court - first under Stephen Daldry, and more recently his successor Ian Rickson - has done much to stir the West End out of its time-honoured complacency. Plays like Mojo, Blasted, Shopping & F***ing and The Leenane Trilogy brought a new, younger audience into town, and showed commercial producers that it was possible to find an audience for new work.

'I'm sure we've helped narrow the gap between commercial theatre and subsidised theatre, but it's still going to be tricky for other people to do the sort of work we've been doing without any subsidy,' says Heywood. 'We were very lucky to find a play like The Weir that proved to have commercial appeal as well as artistic merit.' As for the Royal Court's artistic policy, Ian Rickson is committed to upholding the Court's reputation for 'boldness and bravery… to be political, oppositional and mischievous.' The new writing boom of two years' ago may have levelled off, but the inactivity of the Theatre Upstairs in recent months means there is now a stockpile of new plays itching to be staged. Both Heywood and Rickson are convinced a new wave will emerge from the first season at Sloane Square.

'George Devine said that the trick was to find the next wave before he current wave has spent itself,' says Rickson, 'That sort of clairvoyance is vital. We have to remain as leaders, not followers.'