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Newcastle City Council is planning to cut all funding to arts organisations in the city, including the Theatre Royal, Northern Stage and Live Theatre.

Seven Stories, which has recently been awarded the title National Centre For Children's Books, will also be hit.

Some venues may shut or merge, with Seven Stories and the Theatre Royal "particularly vulnerable", the council said. Both said they are not at risk.

The council is cutting services and 1,300 jobs to save £90m a year.

It is also expected to shut 10 libraries under its plans, which would be phased in over three years.

The council will stop funding the Great North Museum and halve its subsidy for Tyne & Wear Museums and Archives, raising the prospect of entry fees at attractions like the Laing Art Gallery and Discovery Museum.

That comes on top of cuts to the social work budget, the number of looked-after children and its youth service. Council leader Nick Forbes described it as "one of the darkest days for public service in Newcastle".

Theatre Royal chief executive Philip Bernays said the venue would lose more than £600,000 per year, roughly 6.5% of its turnover, but denied that the venue would be in danger of closure.

"On the one hand, it doesn't sound like an enormous proportion, but £600,000 is one hell of a lot of money to have whipped out of the organisation," he said.

"The council is between a rock and a hard place and we all recognise that. Newcastle has rebuilt itself on a cultural renaissance over the past 15 or 20 years.

"It's reinvented itself as a city following the heavy industrial decline, and to throw all that away overnight is madness. Which just shows what an incredible decision the council are facing at the moment because they know it's madness."

The Theatre Royal reopened last year after a £5m renovation and celebrated its 175th birthday in February. Its recent highlights include the world premiere of the Susan Boyle musical I Dreamed A Dream.

Of the other venues, Northern Stage is a highly respected producing theatre and Live Theatre specialises in new writing. It hosted the world premiere of The Pitmen Painters by Billy Elliot writer Lee Hall, which later transferred to the West End and Broadway.

Seven Stories, which opened in 2005, has just been granted permission to use the National Centre For Children's Books title in recognition of its exhibitions about leading authors and illustrators and its extensive archive.

Some 200,000 people have seen its exhibitions over the past year, Seven Stories chief executive Kate Edwards said. The city council's grant accounts for 13% of the organisation's income.

"Looking forward we will build on our strengths and the support of the many thousands of people who value Seven Stories to ensure that we thrive in the future," Edwards said.

"There are difficult times ahead, but we will work hard to find solutions and will work with our partners and supporters to build our fundraising and earn income."

Dance City, the Tyneside Cinema and Globe Gallery are among the other venues that will have funding stopped, with the arts cuts saving the council a total of £1.5m a year.

Announcing the full budget plans, Nick Forbes said the government's funding settlement had put the council "in an impossible position from which there is no escape".

"We will not abandon the residents of this city, but as we cease to provide some services they will have to do more for themselves and expect less from the council," he said.

The proposals will be debated by Newcastle City Council's cabinet on Wednesday before a public consultation.

Newcastle's plans follow a decision by Somerset County Council to withdraw its entire arts budget in 2010 and major council cuts to arts organisations in Derby and Darlington.