The artistic director of the Abbey Theatre, Mr Ben Barnes, has said it is a "distinct possibility" that the theatre might move to the Carlton Cinema site in O'Connell Street.
He said the new road through to Moore Street, which will cut by the side of the site, could potentially give the theatre extensive street frontage.
He added, however, that if the theatre were to move there it would have to be sure that Dublin City Council's "commercial imperatives" in the area did not clash with the development. Asked to elaborate, he explained that shops and restaurants would be welcome neighbours, but slot machines would not.
He added that the Abbey would look at any reasonable "locational solution" in the city centre.
What the theatre needed, he said, was some cash from Government to finance investigation of the options.
The site, which currently consists of 40,000 square metres of floor space, is earmarked for a mixed development including cinemas, shops, a hotel, department stores and a tourist information centre.
However, the Carlton Group, to which planning permission was granted, has failed to make progress on the development. For this reason the City Council initiated a compulsory purchase order on the site before Christmas.
Ms Anne Graham, project manager of the O'Connell Street Integrated Area Plan, said the planned development was still the council's preferred option because it would be the quickest.
Any other project would require a new planning process which might take up to 18 months. The site was now derelict and detracted from the area.
If the council is successful in compulsorily purchasing the site, then it will again become available for development. At that point, she said, the Office of Public Works could approach her office on the Abbey's behalf.