Southwark Council is set to loan £3 million to the Central School of Ballet so that it can fit out its new premises on Hatfields.
News of the loan – which is expected to be approved by Southwark's cabinet after next month's local elections – appeared on the councils 'forward plan' of forthcoming decisions.
The student accommodation opened in 2013 but the ballet school space has lain empty whilst funds to fit out the concrete shell were sought.
A year ago the school launched a fresh fundraising appeal to find £6 million to complete the project.
Now it appears that half that sum will be provided to the ballet school in the form of a loan by the council.
A previous decision by the Labour council to give a £1 million grant to Tate Modern's extension was criticised by local Lib Dem councillors who said that local people should have been consulted.