A CITY'S theatre complex will survive its continuing financial crisis, a civic leader pledged last night.

Durham City Council leader Sue Pitts said she was confident the Gala Theatre would develop to ensure subsidies could be reduced to "manageable levels".

She was speaking in the wake of figures revealing that the theatre, opened less than two years ago, has received a subsidy of £446,000 in the first seven months of the financial year.

This followed on losses in excess of £900,000 in the previous financial year.

Earlier, the city's Labour MP, Gerry Steinberg, said he feared the theatre was "sliding towards bankruptcy".

He accused the Liberal Democrat leadership, which has controlled the city council since its election success in May, of "failing as a custodian of the people's money".

The Gala finances came under discussion at last night's city council cabinet meeting.

District auditor David Parkin described the continued operating loss at the Gala as "a major financial issue for the cabinet".

"I'm sure members will be aware that it's an issue which needs to be addressed.

"It's a continuing problem for the council to wrestle with over how you can minimise the impact to local taxpayers.

"I understand the council is continuing to monitor it and we expect this very close monitoring to continue."

Coun Pitts said the council was striving to reverse the Gala's fortunes.

"We do realise what the issues are about the Gala and we are in the process of taking quite radical steps to address these issues.

"I hope, as from now, it will start to get better, and we should all welcome that things are improving."

The cabinet agreed that, "due to the commercial nature of the operation", Coun Pitts, in conjunction with the council's chief executive and corporate finance director, should regularly review the charges at the Gala.

Ticket prices will be set, "at the discretion of the chief executive", in conjunction with theatre producers.

Speaking before the meeting, Coun Pitts said pre-bookings for the theatre's panto production of Cinderella were almost 12,000, and growing by the day.

"I'm sure that once they have visited this splendid venue they will be looking to see what other shows are coming in the New Year and then return again and again."

She also said the cinema side of the complex is going, "from strength to strength", with a second screen to be added in the New Year.