Experts will meet in the next few days to try to sort out the financial crisis caused by the collapse of the company running one of the region's arts venues.

Moves to wind up the Entertainment Team (Durham) Ltd, which was behind the running of the £14m Gala Theatre, are expected to begin on Monday.

The firm's contract to run the theatre was terminated on Wednesday by the Gala's owner, Durham City Council, after the company ran into financial difficulties.

Directors are understood to have approached Gateshead insolvency practitioner Marlor Walls to carry out a liquidation of the company.

Alan Marlor, of Marlor Walls, said he planned to meet representatives of the Entertainment Team on Monday and then to have discussions with council chiefs.

Staff at the Gala were carrying out stock-takes yesterday in an attempt to provide certified figures for the liquidator.

The theatre is now in the hands of the city council, which has taken its 60 staff on to its payroll.

Chief executive Colin Shearsmith said the authority was still taking calls from creditors said to be owed money.

He said the theatre's trading position had been strong and repeated suggestions that a costly launch event involving boy bands A1 and Westlife was partly to blame for the company's demise.

He said: "The trading position at the Gala could not have caused any company to go into liquidation.

"I suspect that there was some financial problem outside of this."

Councillors were briefed yesterday about the authority's takeover of the Gala at an informal cabinet meeting.

Mr Shearsmith said they had agreed that it was the right approach and were concentrating on trying to make the Gala as successful as it could be.

The council was set to register as a creditor for a £75,000 interest-free loan it gave to the management company.

The authority has some form of protection, as the loan was secured on the personal guarantees of the directors of Entertainment Team (Durham) Ltd.

Director Mike Power was not answering calls from The Northern Echo yesterday and lines to its London head office were engaged.