The Teatro dellOpera in Rome the second most prestigious opera house in Italy after La Scala in Milan has just staged a miracle never before performed in its 124-year history. However, its superintendent and chief-conductor are worried men, fearing the wonder may prove unrepeatable, a flash in the pan.

The miracle, for an opera house that for decades has run up majestic deficits through lavish overspending, is that having balanced its books, the theatre now finds itself in the black. It is the first of Italys 12 state-subsidised opera houses to do so since a 1998 law turned them into foundations. The law opened the way to partial privatisation, stipulating that by 1999 the private sector should be forking out at least 12 per cent of the yearly state grant to the theatres.

The wizard responsible for the colour-switch from red to black is undemonstrative Francesco Ernani, the superintendent of the Teatro dellOpera. Born in the Marche, with his home in Verona, he has now been in the Rome slot for more than five years, a spectacular record in itself. In one year in the 1980s, the opera house got through four superintendents.

How has he done it? Quiet Ernani told Wanted in Rome: If Im given 100, I spend 99. Its always been my way. Previously superintendent of opera houses in Verona and Genoa, he continued: I follow what I call the rules of the economy of art, and in the case of Rome its been first a matter of making the best use of what weve already got, so that we havent had to go scratching around elsewhere or creating shows from scratch.

A dramatic case in point was the set for the revival in October of Fidelio, the same set built by the Rome opera theatre and Covent Garden for a Fidelio in Cardiff in 1994, and never used by anyone afterwards.

However, Ernani said that the theatre continues to maintain standards. He explained: We have kept up the Operas tradition of inviting world-famous artists and great voices. In 2003 the cost of external choruses, conductors, directors, stage designers and the like totalled 8 million.

Ernani continued: Theres been a big change of attitude here. Today, we no longer consider our theatre-goers as customers but as partners. So we have tried to put on what they, not we, find appetising. After all, my job is to fill the theatre.

Too much of a gentleman ever to dream of saying so, Ernani was conceivably referring to an artistic director called Gianni Tangucci, who in 2001 put on La Voix Humaine by Jean Cocteau, billed as a desperate female monologue. He added that there was also Requiem for Edith Stein, set in Auschwitz, during which audiences brought the house down with their booing.

The results of the change have been astonishing. Audiences this year have been as much as 60 per cent up on two years ago, with seats-sold expected to peak at 160,000 by the end of the year. And the other night we had a house of 1,300 for Rossinis Tancredi which, for a work of such difficulty, was a source of great satisfaction for us.

The us referred to included above all the wildly-popular conductor Gianluigi Gelmetti, his rating gauged by explosions of applause that greet his nightly bow from the podium. A Roman who has breathed new life and lightness into the opera theatres 100-strong orchestra and its chorus of 80, the maestro now consistently coaxes out of them fine shades of emotional meaning, which once seemed beyond their scope.

For Rome opera-goers, perhaps the most obvious major change at the theatre has been a re-think of its programming and the organisation of production runs. In the old days, recalled Ernani, several productions would run concurrently, which called for striking and re-building sets constantly, a laborious and expensive business.

By the end of 2004, the Teatro dellOperas three venues (the Teatro Costanzi, the Teatro Nazionale and the summer location at the Baths of Caracalla) will have staged as many as 250 performances, a jump of 50 per cent over the bad old days of reckless extravagance, waste and strike-action. One of Ernanis predecessors in the early 1990s, ran up debts equal to two-thirds of the total spending of the Arts Council in Britain.

What particularly pleases Ernani is the theatres success in enticing new faces into the audience. This year 40,000 young people, who had never previously clapped eyes on an opera in their lives, have come through the door.

Box-office receipts now account for some seven to ten per cent about the national average for opera of the theatres overall income of 52 million, part of which is generated by two private partners, Telecom Italia and Banca di Roma. A third partner, permitted under the terms of the new law, is now being sought.

However, a black storm looms on the horizon. The state, which has always provided the lions share of the funding for opera in Italy, has just drastically cut grants to local councils, Romes above all. They announced the cuts only in July, unexpectedly, when all our planning was done. Its facing us with big problems, said Ernani. At the moment, I dont know how well get over them. The mayor of Rome, Walter Veltroni, is exploring new sources of income, such as national lottery issuesWell see.

One plan is to celebrate the 125th anniversary next year with the same opera that launched the theatre back in 1880 Rossinis Semiramide, a story about the Queen in ancient Babylon.

Is the Queen now for the axe?