According to Lennox Robinson, Lady Gregory 'was - is - the Abbey'. Yet the theatre has responded by failing to mark the 150th anniversary of its founder's birth

In the midst of its present difficulties with the Government over funding for expansion, the Abbey Theatre's board would do well to look not to the future but to the past. In 1926, two years after the theatre had begun to receive financial support from the fledgling Irish State, problems arose over the staging of Sean O'Casey's The Plough and the Stars. George O'Brien, the government's representative on the Abbey board at the time, announced that the play so risked offending sections of public opinion that it might "endanger the continuance of the subsidy".

Meeting to discuss O'Brien's comments, the Abbey's two founders, W. B. Yeats and Lady Gregory, agreed, according to an entry in the latter's journal, that "our position is clear. If we have to choose between the subsidy and our freedom, it is our freedom we choose". The theatre's board should remember those words. It should also remember Lady Gregory and her pivotal role in the creation and survival of the Abbey during the institution's first, vulnerable years when collapse and closure always seemed imminent.

This Friday marks the 150th anniversary of Lady Gregory's birth but, shamefully, the theatre which owes her so much is doing nothing to acknowledge the occasion. The Abbey has not staged any of her plays for decades and seems content to let her memory fade. This is beneficial neither to Lady Gregory's reputation nor to Irish theatre. Even though his friendship with her had come to a close in 1928 after the rejection of The Silver Tassie, Sean O'Casey would write in his autobiography: "Not Yeats, nor Martyn, nor Miss Horniman gave the Abbey Theatre its enduring life, but this woman only, with the rugged cheeks, high upper lip, twinkling eyes, pricked with a dot of steel in their centres; this woman only, who in the midst of venomous opposition, served as a general run-about in sensible pride and lofty humility."

From its foundation onwards, Lady Gregory was unstinting in her support for the Abbey. "Never to the last year of her life did her interest in the theatre flag," wrote Lennox Robinson, who said that where the Abbey was concerned, she was forever like "the hen in defence of her chicks". Whenever a crisis arose - and, after all, the early history of the Abbey was replete with crises - she would abandon whatever else was preoccupying her to give single-minded attention to the theatre.

She raised funds from every possible source for its welfare, toured the US with the company to help develop its international reputation, and used all her extensive social and political connections for the theatre's advantage.

Even while deeply engrossed in the running of a demanding business, she still made sure that the highest standards of artistic integrity and independence were maintained. Long before the fight with George O'Brien over The Plough and the Stars, she had, in the summer of 1909, faced down State authority - then represented by Dublin Castle and the Lord Lieutenant's office - when it had tried to obstruct performances of Shaw's The Shewing-Up of Blanco Posnet. Despite strong pressure from official sources, she and Yeats agreed "that we must in no case go back, but must go on at any cost". The play therefore opened at the Abbey and Shaw, understandably, later called his advocate "the greatest living Irishwoman".

At the same time, O'Casey's term "lofty humility" is an especially good summary of Lady Gregory's character and helps to explain why her posthumous fame has not been as great as it ought to be. She was never concerned with self-promotion, unlike Yeats,whose potentially absurd posturings were accurately satirised by George Moore.

Lady Gregory's immense energy was forever channelled into the betterment of the people and causes she felt merited her support. It was for this reason that she did not demand public acknowledgement for her authorship of Cathleen Ní Houlihan, reluctant to deprive Yeats "from any part of what had proved, after all, his one popular success".

It may seem strange to propose that Lady Gregory, one of the best-known Irish women during the first half of the last century, should have suffered from excessive self-effacement. Nevertheless, her primary interest was always to be of assistance to others, in whatever way possible, whether writing large sections of Yeats's dramatic texts or proposing important changes to those of O'Casey. For 30 years, she read every script offered to the Abbey and it was her judgment that decided which plays should or should not be performed.

What makes these circumstances so remarkable is that prior to the creation of the Abbey, as Lady Gregory herself admitted, she had "never cared much for the stage, although when living a great deal in London, my husband and I went, as others do, to see some of the season's plays".

Even more extraordinary, she was aged 50 before starting to write for the theatre. It is certainly true that in the first 10 years of the Abbey's existence, Lady Gregory wrote too much, often in a hurry and therefore not always to the highest standards. Some of her work deserves to have fallen out of memory, but certain one-act plays such as Spreading the News which was first performed on the opening night of the Abbey Theatre in December 1904, should be revived.

Typically, in the theatre's own programme note on its history, her contribution to the Abbey's opening is overlooked and only Yeats's On Baile's Strand is regarded as worthy of mention. Her short comedies not only possess inherent merit but also offer the best insight into the image of Ireland she and Yeats wished to promote through their venture. Wilfrid Scawen Blunt - admittedly not altogether an unbiased source but still a keen critic of Lady Gregory when it suited him - considered her second work for the stage, Twenty-Five, to be "quite the most perfect little work of art and the most touching play I have ever seen".

Why is it not now being staged in the Peacock Theatre along with some of its fellow one-act plays? Why is the 150th anniversary of Lady Gregory's birth not being marked in any way? Why indeed has not only the Abbey but the State chosen to ignore the outstanding achievements of someone to whom Irish theatre still owes so much? The present members of the theatre's board should reflect on the words written by Lennox Robinson about Lady Gregory after her death and ask themselves whether as much will ever be said of them: "We can rightly praise Synge and O'Casey and many another fine Irish playwright; talk of the genius of this player and that, but without Lady Gregory's doggedness and determination and belief in the Theatre, these people might never have, artistically, existed. Our Theatre would not be open today save for her. Lady Gregory was - is - the Abbey Theatre."

•Colm Toíbín's new biography, Lady Gregory's Toothbrush, published by Lilliput Press,will be launched on Friday at her former home of Coole Park, Co Galway