London's most Jewish theatrical venue is set to close - and become a synagogue.

Artistic director and chief executive Brian Daniels, who has been running the New End Theatre for 14 years, has finally decided to give up the battle against the spiralling maintenance costs of a building that was originally a hospital morgue before it was converted into a theatre 37 years ago.

After the current run of the play Where's Your Mama Gone - which Mr Daniels wrote - ends in late August, work will begin on converting the New End into a Jewish arts centre and synagogue for Hampstead's The Village Shul.

The good news for the theatre's loyal Jewish following is that negotiations are underway for the theatre to move to new premises.

If all goes well, its new venue will be located in the centre of Hampstead. The new New End should accommodate around 100 theatregoers, 16 more than the current building. And it will still be the "go-to" venue for productions of Jewish and Israeli interest.

"The New End has always been the first calling for Jewish and Israeli theatre, and it does mean there is not going to be such a venue until we are re-established in a new home. But we're going to be more selective about what we produce," said Mr Daniels, hinting that it has not always been easy to keep the unsubsidised theatre going over the past 14 years.

During that period the venue has sometimes been criticised for staging "vanity projects" - plays whose production costs have been met by their author - as a way of paying bills. The result, Mr Daniels admitted, has been that there have been some dull stones among occasional gems offered at the New End.

More positively, Mr Daniels listed among his favourite New End shows Steven Berkoff's Sit and Shiver and Sir Arnold Wesker's When God Wanted a Son, though he has mixed memories about staging the world premiere of Benchmark, starring Jerry Hall, in 2002.

"We were sold out for six weeks with advance booking," he recalled. "You couldn't get a ticket for love nor money - until the reviews came out and then you couldn't give them away."

So when the theatre closes after August 28, will there be a closing party marking nearly four decades of opening nights in the building?

"I'm not having a closing party because I don't think we are closing," said the permanently positive Mr Daniels. "We're actually going forward."