OPPOSITION councillors have expressed anger after a body set up to oversee the running of a controversial arts centre was disbanded.

Durham City Council's scrutiny committee has voted to scrap a sub-committee which examines the financing of the city's showpiece Gala Theatre, which has been dogged by controversy since it opened in 2002.

The committee, set up three years ago following widespread disquiet over the running of the £14m theatre, is made up of seven members of the council's ruling Liberal Democrat group, three Labour members and one Independent.

The Lib Dems say the theatre's finances have now been stabilised to such an extent that there is no need for such special measures. But Labour says the move means there will be no accountability over the level of future subsidies to the 500-seat entertainment complex.

The Gala was plunged into financial crisis within days of its opening by the Queen when the private-sector management company employed to run it collapsed with debts of £700,000.

In its first 18 months, the Gala saw several senior members of staff leave their posts and it required a subsidy from taxpayers of more than £900,000 to stay afloat.

However, in March last year, an arts team from Darlington Borough Council was recruited on a one-year contract to revive the theatre's flagging fortunes.

The annual subsidy has since been cut to less than £650,000 - leading Government watchdog the Audit Commission to give the theatre a clean bill of financial health earlier this year. In April, Simon Stallworthy was announced as the Gala's new manager, an appointment described by council bosses as "the final piece in the jigsaw".

The improved financial position, says the council, means the theatre no longer needs special attention.

Lib Dem Councillor Bob Wynn said: "The council feels the Gala is now on a stable footing and is no longer a special case.

"In future, it will come under scrutiny like everything else. If a councillor feels they want to scrutinise any department of the council there are procedures there to be followed."

However, Labour councillors are angry at the decision to axe the sub-committee.

Councillor Eileen Rochford said: "This means that the Gala finances, losses or subsidy, will not be scrutinised in detail and they will not be held accountable.

"Any council establishment that is being subsidised to the extent that the Gala is being subsidised should be monitored closely by members.

"We are using taxpayers' money to run the Gala and the Liberal Democrats are putting a stop to the accountability they promised."