TAXPAYERS will have to start funding Durham's Gala Theatre from next year.

The city council took over the running of the £14m Gala last year after its management company, The Entertainment Team, went into liquidation.

It emerged that the firm had amassed debts of £700,000, which its many local creditors are unlikely to ever recover.

Despite assuming control, the council pledged that taxpayers would not be relied upon to rescue the Gala, which forms part of the £30m Millennium City development.

Now its chief executive, Colin Shearsmith, has admitted that from next year, they will be supporting it.

He said: "We will use a contingency fund to deal with this year's provision but there isn't a theatre in the land that doesn't have some kind of subsidy.

"In future years, that will need to come from council tax, and why shouldn't it - it's been a massive stimulus."

But he added: "At the end of the day, we are aware of how sensitive local populations are to rises in council tax and we will not put ourselves in a position where Gala will cause outrageous and unacceptable rises."

The council's Annual Audit Letter states 'significant' revenue costs were incurred running the Gala in 2001/2002.