A FINANCIAL crisis at a £14m theatre could leave scores of staff out of pocket, The Northern Echo has learnt.

Staff at Durham's Gala Theatre were thought to have been unaffected by the collapse of its management company.

But last night, the Gala's owners, Durham City Council, admitted it had been forced to make loans to employees, some owed at least three weeks' wages.

The cash has to be paid back through future salary contributions.

Sixty full and part-time staff who work at the theatre were taken on to Durham City Council's payroll when Entertainment Team (Durham) Limited was placed into liquidation with debts of £700,000.

The authority hopes to recover the wages owed by making a claim against National Insurance contributions.

Colin Shearsmith, chief executive of Durham City Council, said it had advanced pay to those staff affected. He believed most were owed about a week's wages, but said that some salaried staff could be owed more.

He said: "We are trying to make sure they will not be out of pocket by keeping them in funds while we examine how we can get back the money they are owed by the Entertainment Team.

"I am confident they will be reimbursed, but in the meantime we have agreed that they can pay the advance back at a very low rate which we will recover over a period."

When it terminated the Entertainment Team (Durham) Ltd's contract last month, Durham City Council announced it would run the Gala for a 13-week period.

A decision is yet to be taken on whether it will run the venue permanently or seek a new company to manage it.

Staff, some of whom are understood to have been put on three-month contracts, are now anxiously awaiting the council's next move.