* Grandage offers one quarter of tickets at 10 pounds
* Inaugural season of new company opens on Monday
* Season features Jude Law, Daniel Radcliffe, Judi Dench
LONDON, Dec 7 (Reuters) - One of Britain's top directors Michael Grandage is targeting the next generation of theatre-goers by offering one quarter of all tickets to his upcoming, star-studded season for 10 pounds ($16) each, a fraction of what they would normally cost.
The award-winning 50-year-old has just set up the Michael Grandage Company after a successful 10-year tenure at the Donmar Warehouse in London, and has announced a five-play season that opens on Monday with wartime drama "Privates on Parade".
Other theatres have introduced similar schemes to fill seats and draw in new audiences, but Grandage's is on a large scale and aims to ensure that the ageing population of regular theatre-goers is replaced over time.
"The centre of what we're addressing is changing the demographic of a normal West End audience," Grandage said.
"We need to focus on core audiences because they are the people at the moment keeping the West End open," he told Reuters. "They will eventually die, and what we are doing is to make sure there is a group of people who replace that audience.
"If we don't find them early and get them excited about coming to the theatre early, it's not something you tend to stumble across in middle age," he added.
Over the 15-month season, the company is reserving 100,000 seats at 10 pounds each out of a total of around 400,000. The top price of 57.50 pounds will partly "subsidise" the cheaper tickets, he said.
Grandage is one of several leading figures in British theatre to warn against complacency amid strong ticket sales in London's West End and its main government-supported venues.
Kevin Spacey, who runs the Old Vic theatre, said earlier this year that Broadway and the West End were in danger of becoming an "exclusive club" and that he was "embarrassed" at the "short-sightedness" of many directors.
London stage revenues in 2011 hit a record 528 million pounds, up 3.1 percent from 2010, although attendances fell nearly two percent to 13.9 million.
JUDE LAW, JUDI DENCH
Grandage said he and other directors were having to think long-term in spite of the pressures brought on by economic stagnation and government spending cuts.
"In a way I wish governments would do it," he said. "One of the problems about the recession ... is that it's stopping governments thinking long-term which is really sad."
He said he wanted the government to change its attitude towards the arts, which, like most sectors of the economy, have faced significant cuts in funding.
"I get very, very irritated that's it the word 'subsidy'," he explained.
"Every other industry the government gives money to they call it investment, and yet our (financial) return for the government is colossal. 'Subsidy' is a very difficult word, because people say 'why should we subsidise the arts?'"
The inaugural season will comprise five plays including a new work by John Logan, "Peter and Alice", starring Judi Dench and Ben Whishaw - who were recently united on the big screen in the latest James Bond movie playing "M" and "Q" respectively.
Logan's first new play since "Red", which won six Tony Awards on Broadway in 2010, is set in the 1930s and brings together the "original" Alice In Wonderland and Peter Pan.
Simon Russell Beale will take on the role of cross-dressing Captain Dennis in "Privates on Parade", and "Harry Potter" actor Radcliffe performs the title role in "The Cripple of Inishmaan".
Two works by Shakespeare round off the season -- "A Midsummer Night's Dream" featuring comedian David Walliams in the part of Bottom and "Henry V" with Law in the title role.
Every production will have at least one free performance for schools and colleges from London focusing on first-time theatre-goers. (Reporting by Mike Collett-White)