The Liverpool Institute for Performing Arts has been swamped with applications for its dance, acting and music courses despite being dogged by financial and management problems in the past.
According to Lipa head Mark Featherstone-Witty, the "fame" school is ready to expand. He said: "We seem to be going through a period where everyone wants to do performing arts, both on the performance side and on the side of things that make performance possible."
While the growth in interest in the performing arts is likely to have been fuelled by the popularity of TV shows such as Fame Academy and Pop Idol , Lipa claimed to have had more applications per place than any other performing arts institution in the country last year. This year it has had 3,561 applications for 250 places, with 1,500 hopefuls applying for just 30 places on its acting degree course.
In September, Lipa launched its first postgraduate course, a one-year diploma in acting. Two other postgraduate diplomas are planned to follow next year - one in stage dance, another in singing, music and dance.
Despite these developments and Lipa's clean bill of health from the Higher Education Funding Council for England, Mr Featherstone-Witty said he was "still feeling sore" over an audit report from Hefce two years ago that criticised management and financial arrangements at the institute.
A report from Hefce in May 2001 warned that fundamental improvements in governance and management were required before the institute could "satisfy the demands of public accountability".
Mr Featherstone-Witty said: "The fundamental issue that we were criticised for was our inability to plan five years in advance. It was a bit rich, because at that point we had no idea what our funding was going to be."
That problem had been resolved, he said, because Lipa had been placed in a group of performing arts institutions that received a special premium of 30 per cent extra for teaching. "We know where we are going because, for the first time, we are in a position where we can plan."
Lipa hopes to generate a surplus of about 3 to 4 per cent of its annual turnover, which stands at Pounds 5 million. Mr Featherstone-Witty admitted that Lipa had been "treading water" financially since its launch in 1996, but said it had never been in the red.
If this target is to be achieved, Lipa cannot afford to miss the opportunity to charge top-up fees, he said. "A third of our students are from overseas and they pay annual fees of about £8,000. It has to be the case that they are subsidising our home students, which means that if there is an opportunity to charge top-ups we would want to take it," he said.
Lipa also plans to do more of what it is best at - getting its graduates into the performing arts and entertainment industries.
"In three years' time we will be ten years old. We would like to be able to show we have come from nowhere and we are up there with the best," he said.