MANAGERS at a flagship arts venue left just £7,500 in assets to pay debts of more than £700,000, it has been revealed.

The Entertainment Team (Durham) Limited was appointed by Durham City Council to run the £14m Gala Theatre which opened in January. But it ran into financial difficulties and is now in liquidation, having had its contract terminated last month by council chiefs.

Hundreds of creditors - including Natwest, Newcastle Breweries and boy band A1, which appeared at the venue - are unlikely to get their money back.

A statement of affairs for creditors reveals that only £7,586 is available from the company's assets to pay the debts that accumulated.

Durham City Labour MP Gerry Steinburg has already called for an inquiry into the financial debacle which has surrounded the theatre.

The management company collapse has been blamed on the late opening of facilities, including caf and bars, and a disastrous opening event featuring pop group Westlife.

Liquidator Alan Marlor, of Marlor Walls, Gateshead, said the Entertainment Team (Durham) Limited had run up an enormous amount of debt in just five months. He repeated that creditors would probably get nothing.

Company directors Michael Power and Nicholas Rule could face disqualification from future directorships.

By law, reports have to be prepared on the directors of a liquidated company. These are then sent to the Department of Trade and Industry, which decides whether they are fit to hold directorships.

Mr Marlor said the theatre appeared to have opened without the financial reserves to fall back on.

The management company borrowed £75,000 from Dur-ham City Council when its financial difficulties emerged. The authority is owed £209,000, as detailed in a list of the company creditors.

Mr Steinburg said: "Clearly a lot of money has gone into the theatre and disappeared."

It is expected that Durham City Council will continue to run the theatre for the immediate future with decisions yet to be taken on whether a number of planned shows will go ahead