It's been a turbulent start for the manager of Durham's new theatre, but in his first interview since news of the financial crisis broke, Rob Flower tells Nick Morrison why the Gala still has a bright future.

'ARE you here to interrogate me?" Rob Flower says with a half-smile, and only a half-smile, as we settle into the comfortable leather sofas in the theatre's foyer. And, in truth, it's hard to blame him for being a little suspicious.

After the initial excitement over its opening, recent publicity has not been at all favourable for Durham's Gala Theatre. After weeks of rumour - and firm denials of anything amiss - it emerged the venue was in trouble. Reported debts of £100,000 spiralled to £700,000 once the books were examined. The management company running the Gala - the Entertainment Team - went into liquidation just two weeks after the theatre was officially opened by the Queen and the city council took over running the Gala itself.

Presumably this is not what Rob Flower expected when he left his job as operations manager at the Royal Albert Hall to become general manager at the £14m venue on the banks of the river Wear. But far from being defensive, even before our cappuccinos have arrived, he is berating the media, and me as its proxy, for the coverage of the crisis.

"There is a difference between the Entertainment Team's failure and the business of the Gala. The Gala has always been on track, so all these expressions of 'doomed theatre' are totally untrue. It was the Entertainment Team that failed as an organisation, not the Gala," he insists. "The Gala is on target to do well. We have had a number of sell-out shows, we have had very good support from the community, and this is a very positive going concern. It is important to recognise that, and stop knocking the Gala. Knock the Entertainment Team as much as you like, because there is justification for that, but the future of the Gala is very strong."

The Entertainment Team's troubles are said to start from the Gala's opening event, six months ago. A star-studded line-up, featuring boyband Westlife no less, seemed sure to get the theatre plenty of publicity, which it did. Unfortunately, it also lost a lot of money.

The concert was to have been beamed live to a marquee, but this was scrapped when tickets failed to sell, the result of poor marketing, Mr Flower says. He says the opening event was always going to lose money, mainly due to bringing in such expensive artists, but presumably no-one worked out how much.

But none of this reflects badly on Mr Flower, or indeed on any one of the Gala's staff. Because, you see, the whole event was organised by the Entertainment Team, from London, while Mr Flower and his team in Durham were busy getting the theatre up and running.

Once the dust from the opening concert had settled, the Entertainment Team then used money the Gala was making week-to-week to offset its losses, until eventually - in mid-May - they proved unsustainable and it went into liquidation.

Mr Flower says he became aware that something was wrong in April, when suppliers started cutting off credit, but he was reassured by the Entertainment Team in London that all was well. He says he was unaware that the Entertainment Team had secured a £75,000 loan from the city council in April until after it had been agreed, and he says it was only in mid-May - just days before the city council pulled the plug and took over the Gala itself - that he began to lose faith in his then employers.

"I think it was probably an increase in calls from creditors, and concerns generally from colleagues that they were having difficulty in ordering supplies, and we were receiving less reassurance from London than we had previously," he says.

When a city council-appointed accountant looked at the Gala's trading position, it was found to be not quite as the Entertainment Team presented it. But when I suggest he must feel let down by his former employers, he dismisses the idea.

"My view is they remained eternally optimistic with regard to the trading position. As people, they were incredibly well meaning and incredibly enthusiastic about the Gala. They wanted nothing but the best for the Gala. I think charitable thoughts of them. They did an awful lot of good for the Gala in terms of the opening profile. I think their aspirations probably out-stretched their ability to deliver, which was unfortunate."

THE liquidation was obviously a dark time, but he says he never thought the Gala would close. And when I ask if he, as the general manager, bears any responsibility, he has an answer ready. "I think, rightly or wrongly, the Entertainment Team in London kept us at arms length from the financial detail from the outset to the very last moments. We as individuals, and as a management team, were not privy to the major financial decisions," he says.

This seems a strange set-up to me but he insists it is not unusual in the theatre world, and he had no reason to question it. But it becomes clear that the mistakes were made by the Entertainment Team "in London", while the successes were down to the team up in Durham. Fortunately the good people in the North-East were suitably distanced from London's pernicious influence.

But now he is predicting a rosy future for the Gala. He is hoping signs will go up around the city to tell everyone where the theatre is, there will be a new marketing strategy and a survey to find out what people want to see. Maybe some of these should have been done before it opened, but he says the Entertainment Team didn't have the money.

The theatre is also constantly looking at little improvements. He tells me a recent change was to move some of the leather sofas from the bar at the back to the entrance, to make it more attractive. Talk of moving the deckchairs on the Titanic would be entirely misplaced.

The city council is still deciding what to do with the venue: whether to run it itself or get someone else in, but Mr Flower says its prospects are good, with a strong autumn programme including Hay Fever, Billy Liar, Alan Ayckbourn's Taking Steps and then Timothy West in King Lear in November.

Audience figures so far have been good, he says. Although the Gala is not meeting its 65 per cent capacity target, he says it is "probably just one or two" per cent off and he expects to reach it soon. He says this was always more than a break-even figure, but is more cagey when I ask if the Gala is breaking even.

"We're running on target. We're getting the kind of figures we would expect at this stage of the operation. You are not getting me any further than that," he says. "I would expect the trading position to grow stronger, and there is enormous potential here."

He insists his enthusiasm for the job has not diminished and he has no regrets about leaving the Albert Hall. "Every day I get excited about coming to work, even through the troubles of the last few months. Every day I wake up and think 'What is ahead today? What challenges?' There are some challenges that are more enjoyable to deal with than others, though."

While he can't blame the media, and the public, for approaching the Gala with a little scepticism, nor can you fault his apparent sincerity in wanting to make a go of it, and his belief that it will work. As I leave, he invites me to the first anniversary party next January. A date has already been set aside, and this will happen "come what may". I hope I'll be able to make it.