A THEATRE that has been at the centre of controversy since it opened three years ago has stabilised, according to an audit official.

The £14m Gala Theatre, in Durham, has had a chequered history, including the collapse of the management company hired to run it with debts of £700,000.

The size of the subsidy it gets from Durham City Council has also been criticised by some taxpayers.

For the first time, the 500-seat entertainment venue could end the financial year slightly below budget.

The Audit Commission has previously highlighted the Gala's financial position as a major concern, but said the theatre was meeting financial targets.

The commission's annual audit and inspection letter said the theatre could end the year £16,500 below the £650,000 that has been set aside for subsidy.

The theatre required more than £900,000 in its first year and last year needed a £753,000 subsidy compared to the £750,000 budgeted for.

Darlington Borough Council's arts team was brought in last March to run the venue for the council for 12 months.

The council is advertising for a theatre director and a programmer to take over.

The city council's executive director, David Marrs, said: "The Gala needed stabilising and we have done that.

"All of the issues of the past have been sorted and the audience is building. We set ourselves a target of a ten per cent increase on last year's audience figures and we hit that at the end of December."

Published: 20/01/2005