East End music hall where W C Fields juggled is reborn as Britain's newest opera house

A faded Victorian theatre that was long the home of the East End music hall tradition is to reinvent itself as an opera house to rival the London Coliseum. The 102-year-old Hackney Empire, which once played host to the likes of Charlie Chaplin and W C Fields, will reopen after a £15m redevelopment as a venue worthy of English National Opera.

News of the transformation is likely to irritate the beleaguered ENO, whose base at the Coliseum is due to close for its own refurbishment shortly after the rejuvenated Empire reopens in September. One of the first productions at the new-look Empire will be a revival of Mozart's little-performed Zaïde, directed by Jude Kelly, an acclaimed alumna of ENO and an outspoken critic of its management.

Ms Kelly, whose debut opera, The Elixir of Love, was performed at the Coliseum, was one of seven signatories to a letter condemning the ENO board for sacking its general director, Nicholas Payne, last July. The letter "deplored" the decision and called for it to be reviewed by the Arts Council, as well as criticising ENO's controversial chairman, Martin Smith, for running it like "a business".

Ms Kelly's decision to take her latest production to the Empire rather than the Coliseum is likely to be seen as a calculated snub by some at ENO, which is struggling to stabilise its fortunes after months of turmoil. Earlier this year, the company suffered a series of resignations and strikes by its chorus after announcing plans to make up to 100 redundancies in an effort to curb a spiralling deficit.

Asked about her decision to stage her latest show at the Empire, Ms Kelly said: "I've always admired the Hackney Empire because they are so stubbornly determined to hold on to their values as well as moving into new areas. Opera needs to be seen as not just the prerogative of the big opera houses. I hate this distinction between low-price community revues and high-price elitist venues. For opera to be re-embraced by broader audiences it has to be performed in different kinds of venues."

However, Ms Kelly denied there was any significance in her decision to stage her next opera at the Empire, rather than the Coliseum. "It's really not related at all [to her criticisms of ENO]," she said. "We've been planning it for a year and a half."

Ms Kelly, a former director of the West Yorkshire Playhouse who is tipped as a future head of the National Theatre, has taken some liberties with the new opera. Based on an incomplete Mozart composition, it features an ending written by the poet Michael Symmons Roberts, who was shortlisted for this year's T S Eliot Prize.

Zaïde, which opens in November, is produced by the Classical Opera Company, an acclaimed touring troupe which has signed a three-year contract with the Empire.

The Empire's metamorphosis into a venue resembling a downsized Coliseum carries a certain note of poignancy. Both buildings were designed by the same architect, Frank Matcham, famed for his love of the Italian rococo style.

Roland Muldoon, the Empire's artistic director, said of the theatre's rebirth: "We staged some operas a few years ago and they were so popular that we decided to make opera a big part of the renovation. We've now got a 60-man pit, which turns us into a proper medium-sized opera venue.

"Of course, we'll continue to stage comedy and panto, but there will be an emphasis on opera."

In a sideswipe at ENO, he added: "We are opening with a good, unusual opera with a great director behind it. But it's not The Magic Flute - it's not chocolate box."

An ENO spokesman brushed off concerns about the newly revitalised Hackney Empire, saying: "We are big enough to cope with something like that. Our capacity is 2,380 and the Empire is about 1,000, so obviously it's on a smaller scale."