SYDNEY: Oscar-winning Australian actress Cate Blanchett and her writer-husband Andrew Upton will become creative directors of the Sydney Theatre Company in 2007 ¨C the theatre where Blanchett began her acting career 13 years ago.

Blanchett who, despite her demanding Hollywood schedule and celebrity status has continued to perform live on stage, said the new job of directing a theatre company would be challenging.

"The quality of the work achieved over the last few years and the establishment of the STC Actors Company have raised the bar for theatre in Australia," Blanchett told the Sydney Morning Herald newspaper on Thursday.

"Andrew and I look forward to deepening, extending and consolidating that achievement," she said.

Blanchett's appointment took the Sydney theatre community by surprise. The current director, Australian Robyn Nevin, had earlier said she had no plans to step down.

"It (the appointment) takes your breath away. It's very, very exciting," said Jonathan Biggins, director of Sydney Theatre Company's Wharf Revue.

Blanchett, who won an Academy Award in 2005 for best supporting actress in The Aviator, and her husband returned from Britain this year and now live in the leafy northshore Sydney suburb of Hunters Hill. Blanchett divides her time between acting in plays in Australia and Hollywood films.

Her latest film Babel, in which she stars with Brad Pitt, was released in the United States last month to acclaim and is being suggested as a possible Oscar nomination.

The couple's first task when they take the reins at the end of 2007 will be to programme the company's 2008 season, but they also plan to write and act with the company.

"As a team we come to the role as joint artistic directors first and foremost as an actress and a playwright," said Blanchett. "Both of us are passionate about the theatrical artform in all its mad variety."

Blanchett has been involved with the theatre company since 1993, when she first appeared in its production of Oleanna, a year after she graduated from acting school in Sydney.

In 2004, Blanchett starred in the company's production of Hedda Gabler, which toured to New York. This month, she will direct the company's A Kind of Alaska, marking her first project in the role.

Upton has also written several plays for the company, and was recently appointed as the STC's artistic associate.