Dalston’s struggling Rio cinema plans to reverse its fortunes by building a second screen in the basement, the Gazette can reveal.

Bosses hope to turn the Rio’s “precarious” financial position into a viable one, and will start trying to raise £300,000 to fund the screen next month.

The news comes amid a bitter row over a total restructure at the cinema in Kingsland High Street between management and workers, who were on strike yesterday.

A petition calling for a pay rise for staff, who are paid less than the London Living Wage, has reportedly been signed by Rio’s patron and award-winning director of Senna and Amy, Asif Kapadia, as well as actress Zawe Ashton, who used to work at the cinema as a teenager.

Out of its 31 members of staff, 13 voted to take industrial action over forced redundancies, which are due to take place on June 1.

Joel Pullin, who began the online petition that now has more than 2,200 signatures, said: “Management have claimed they have no choice but to cut staff in order to pay the remaining staff better wages.

“Rio staff want change but the board’s cynical response to the recent wage dispute means their proposed restructure will cut hours and therefore salaries in real terms.”

But executive director Oliver Meek, who took over running the cinema, which is run as a charity, last February, told the Gazette unless drastic action is taken at the cinema – which lost £40,000 last financial year – it could go under.

He said: “People know the Rio has been in a precarious state for a long time. I’m not the first to acknowledge pay is not good enough here and does need to be higher.

“I realised we needed a complete overhaul of the Rio from the bottom up, firstly to make sure the cinema is sustainable for the future as it’s been losing money for the best part of the decade and to make sure I can pay staff properly.”

He continued: “The restructure is looking to reduce the team by four or five staff – 31 is a lot for a single screen cinema. It was obvious from the start there were too many people on the books.”

Mr Meek also described how “well developed plans” for a second screen in the basement would “have a transformative effect on the viability of the cinema”.

“Then we would be able to pay the London Living Wage, do more of the community work we value highly and preserve this fantastic building, which is one of the most important in Hackney,” he said.

“The idea is to regenerate the Rio and make it viable and profitable – then we can support ourselves rather than looking to the community to support us.”