Stockton's multi-million pound arts venue has been dissolved today after being beset by financial troubles for more than two years.

The Arc opened three months late and £1million over budget in January 1999 and since then it has failed to live up to expectations.

What was originally an £8.5million building became £9.5million and in the summer of 1999 had to close for two days a week because of cash shortages. The cinema was also closed during the same summer for two months.

Staff at the venue where given their notices earlier today as the building shut its doors.

One employee, who did not wish to be named, said: "We are all gutted. What is there for Stockton now?

"I couldn't believe it. There are a lot of questions that need to be answered. It has been hard, but it will be a relief to get it all out."

A statement was issued on behalf of the Arc Trust Limited, who said the company was to be liquidated with immediate effect.

It said: "This step has been taken after long and careful deliberation. It follows the very disappointing news that the Arts Council of England has still been unable to make a decision on the board's request for acceptance onto its 'recovery programme."

"The board wishes to pay tribute to Bernhard Lanz and his staff team at Arc, who have worked with great dignity and professionalism through some very difficult times."