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The Arts Council of Wales (ACW) says it is 'relieved' it can increase funds to many of the 71 organisations it supports despite government cuts.

Its budget has been trimmed by four percent and it must save 12% running costs but it will spend an extra £3.6m on its portfolio.

Five groups will receive less money, with the touring company Hijinx Theatre saying it was "reeling" at the news.

But five others have been awarded fixed funding for the first time.

Some leading figures in the arts in Wales have said the settlement compares very favourably to what is happening elsewhere in the UK.

The ACW announced last summer that it would stop funding 32 groups as a result of an investment review.

Chief executive Nick Capaldi said it had been forced to take difficult decisions but as a result of that strategy it was able to increase money to most organisations it still supports.

"The settlement was better than we had expected," he said.

But despite his "relief" cuts had not been on the scale imposed by their counterparts in England, Mr Capaldi said ACW was going to have to look carefully at the way it was run and "may well need to do things differently in the future."

Peter Florence, director of the Hay Festivals Group, said: "This is an incredibly good settlement for the arts in Wales - much better than England achieved, much better than Scotland achieved.

"We have to take some kind of view that the people running the Arts Council know what they're doing.

"They're the only ones with a full national picture and if they make calls about some people who are innovative and creative and get funding and some who don't, then they're probably the best-placed people."

Among those seeing large increases in their funding are Artes Mundi, Disability Arts Cymru, Mid Wales Opera and National Theatre Wales.

The Welsh National Opera, which saw a £500,000 cut its funding from Arts Council England supporting its touring programme, will receive an additional £250,000 on top of the £4.5m it previously received.

But Mr Capaldi said that was to support the company's work in Wales and not to compensate for the money lost.

Five groups - the Canolfan Gerdd William Mathias music centre in Caernarfon, Cardiff-based NoFit State Circus, Independent Ballet Wales, the Sinfonia Cymru orchestra and Abergavenny-based Theatr Ffynnon will receive guaranteed ACW funding for the first time.

Dafydd Roberts, chairman of Canolfan Gerdd William Mathias, said: "It's good news for us.

"Before we were a lottery client which meant we went from project to project and there was no long term security but now we can plan ahead."

The five organisations that will see funding cuts include Cardiff's St David's Hall, Swansea's Grand Theatre and Llandudno's Venue Cymru.

Hijinx Theatre which loses over £74,000 said it was "confused and demoralised" by the announcement.

It said it was the only company in Wales touring to community venues annually with outreach activities for groups within the learning disabled community.

Val Hill, administrative director, said: "This means that people all over Wales will suffer both from a lack of professional performances to see and participatory activity to be part of.

"We will need to restructure the company and will have to apply for transition funding to help with this.

"I don't know what our future holds."

But Mr Capaldi said ACW was ensuring the best of the arts in Wales, from organisations with an international reputation to those working at the grassroots, continued to thrive.

"Every organisation that is in the portfolio is one that we believe in and have confidence in," he added.

"We intend to maintain their level of funding into subsequent years."