The Newcastle producer of £5m musical Billy Elliot spoke of his bitter disappointment last night over a series of disasters which have forced him to cancel November's world premiere in his home city.

Last month's shock closure of the city's Tyne Theatre left the eagerly anticipated stage adaptation of Lee Hall's North-East-based film in difficulty, and now producer Jon Finn has decided to press ahead with a London opening at the Victoria Palace in March.

Mr Finn admitted that time had run out on negotiations to bring the production to Tyneside, mainly because it involved raising a further £1m to ensure that West End-sized sets could be shrunk down to fit the Tyne Theatre's smaller stage.

He said : "It's a real pig. We've been battling with this for three months and, finally, last week we couldn't see any way of making it work.

"The theatre going into liquidation was problematic but the killer blow was having to build two shows because of the different shapes of the theatres. That became really cost prohibitive. We worked out some ways of off-setting this money with sponsorship, but we ended up getting less than we thought.

"I've got to say that the Adderstone Group, who own the theatre, couldn't have done more to try and make it work."

Mr Finn said that the production team had rejected the idea of playing a reduced show at Newcastle.

"I wanted to do the show in Newcastle because that's where I come from and Lee Hall (who travelled out to the US to create the new version with Elton John) was the same. The show was going to cost about £1m extra to bring to Newcastle and it just became a business decision in the end."

He is still hopeful that Newcastle will be the first venue to stage Billy Elliot The Musical if a successful West End run funds a touring version.

There are hopes that this disappointment will finally ensure that the troubled Tyne Theatre has a long-term future, particularly now that SMG Europe (who operate the nearby Metro Radio Arena) have agreed to take over the running of the building.

Plans are still going ahead with announcing the three youngsters who will share the role of Billy in September and the hunt has already started for three more 11-year-olds to play the all-singing, all-dancing miner's son who becomes a ballet star.

The World Premiere is now due to take place on March 28, 2005, in London.