The performances, planned as part of a year-long festival celebrating the 200th anniversary of Hans Christian Anderson's birth, were to be underwritten by the Hans Christian Anderson Foundation, which was evidently covering most of the cost of the lavish production.

The foundation's finances have suffered from poor ticket sales for its high-profile events. The Danish Government told the foundation to cut its budget by A$3.5 million.

Richard Evans, executive director of the Australian Ballet, was notified last weekend of the foundation's decision when Lars Seeberg, the foundation's secretary-general, called him.

"[Apart from this], it was done with no consultation with us," Evans said. "I can only assume the manner in which they handled this [reflects] the endemic problems they're experiencing with the festival as a whole."

The company's next tour is Graeme Murphy's Swan Lake, which travels to the U.K. in July. Last year's tour of Swan Lake to the Kennedy Center was cancelled after the center took back $US250,000 in funding because of financial problems of its own.