Cirque du Soleil, a Canadian-based entertainment and performance company, has sold a 20 per cent stake of its business to Dubai-based property developer Nakheel and investment company Istithmar World Capital for an undisclosed fee.

The deal keeps founder Guy Laliberte in control of the company he formed in 1984 and ends speculation that the business would be sold outright.

The company helped revitalise the circus industry by replacing traditional animal acts with acrobats, dance and live music. More than 10 million people per year see its shows and it generates more than $700 million (£359 million) in revenue.

Nakheel and Cirque du Soleil agreed in May to build a 1,800-capacity theatre on Palm Jumeira, a massive palm-shaped island housing development in the Persian Gulf which will house a permanent Cirque du Soleil show beginning in 2011.

In July, Cirque du Soleil denied media reports that it had received a $2 billion (£1 billion) takeover bid from Dubai, but admitted it is approached regularly about possible deals.