THE future of a £14m theatre beset by financial problems could be decided at a crunch council meeting later this month.

Durham's Gala Theatre was placed into the hands of the city council when its management company crashed in May, with debts of £700,000.

A 13-week deadline was imposed while discussions took place over how it should be managed.

Last night, council leader Maurice Crathorne said he was expecting a decision to be made at a cabinet meeting on Wednesday, August 28.

He said: "We will be receiving a report and deciding what the best way forward will be."

Questioned on whether or not the Gala was now breaking even, he said he would be "very surprised".

The city council said it had received detailed proposals from a number of companies interested in running the Gala, which it is examining.

But, despite an apparent upturn in attendances, doubts remain over the theatre's long-term financial viability and its attractiveness to anyone seeking to buy into the venue.

The Northern Echo revealed earlier this year how one option was to hive off the arts complex's various functions, such as its large screen cinema and restaurant.

Should the city council decide to continue running the venue in its entirety, it may be forced to provide some kind of subsidy.

It has previously said there will be no additional expense to the tax payer as a result of it taking over the Gala.

Some staff are on short-term contracts and are now awaiting the council's next move.

Chief executive Colin Shearsmith said: "I am delighted with the tremendous support provided by Gala staff, and the level of interest we have received from organisations that would like to manage its future.

"Gala has had a busy summer, and is coming up to a new autumn programme of plays and events that is the most exciting yet, with a choice of entertainment that will suit everyone. The most important thing is that we make the best possible decision to underpin its future success."