Network Rail has agreed to offer Southwark Playhouse a new home in the rebuilt London Bridge Station, it emerged this week.
Dozens of people have written to Southwark Council supporting the theatre. Organisations such as the Theatres Trust have also intervened on behalf of the much-loved local charity.
Council planning officers also wrote to Network Rail insisting that, as a minimum, space for Southwark Playhouse should be incorporated into the rebuilt station.
This week Network Rail's agents replied to the council to confirm that the theatre would be able to return to the station complex.
"Network Rail is prepared to offer Southwark Playhouse the opportunity to take 'leisure' space in the final scheme," said Erica Mortimer of planning consultants CgMs.
"The remaining space will be offered to other 'leisure' tenants who would like to return including the Britain at War Museum."
Southwark Playhouse has welcomed the rail company's change of heart.
"In principle the statement from Network Rail to commit to creating space for Southwark Playhouse as part of the new station is encouraging and we look forward to talking to them over the next few weeks to work through the detail," says artistic director Chris Smyrnios.
Cllr Fiona Colley, Southwark's cabinet member for regeneration, added: "I'm really pleased that Network Rail took on board the importance of ensuring a future for Southwark Playhouse in the London Bridge footprint.
"This part of the borough is home to several arts and theatre companies which all contribute to its buzzing atmosphere.
"I hope that Southwark Playhouse will continue to provide the high quality performances it's famous for to entertain residents and visitors for years to come.
"We will continue to work with them and Network Rail to ensure all the details are worked out."
Val Shawcross, London Assembly member for Lambeth and Southwark, recently questioned the Mayor on his support for the theatre.
She said: "The playhouse is a really important asset for SE1 and the ideal long term solution would be for the theatre to be given a permanent home in the rebuilt station. It's a perfect location.
"But in the meantime its vital that they can continue their performances by being protected from the construction noise and dirt at the early stages and being given a temporary home nearby until the new London Bridge emerges.
"Network Rail is not short of railway arches so I am confident they can and should help!"
Southwark Playhouse had been due to make its long-term home at the Elephant & Castle as part of the 360 London development. Although the Homes & Communities Agency said earlier this year that it planned to implement the scheme the future of that project remains unclear.
• Local residents are invited to a meeting of Bermondsey Community Council at 6pm on Thursday 13 October at 160 Tooley Street. Representatives of Network Rail will give a presentation on the plans for the London Bridge Station development.