Billingham Forum - one of the North-East's best-known leisure centres - has been earmarked for demolition to make way for a supermarket.
The future of the sports complex and theatre - opened by the Queen in 1967 - will be discussed by Stockton Borough Council, which owns the site, at a meeting tomorrow.
A report into the redevelopment of Billingham town centre recommends:
l A supermarket be built on the site of the Forum;
l Development of a sport and leisure complex on John Whitehead Park opposite the Forum;
l New education, arts and community facilities;
l Fewer shops and improvements to shop frontages within the town centre;
l Improved car parking.
The authority hopes to win funding from the regional development agency One NorthEast, the European Regional Development Fund, English Partnerships and private finance.
While townspeople will no doubt welcome a brighter and better-looking town centre, the proposal to get rid of the Forum - which includes the theatre, an ice rink, a swimming pool and sports halls - will face considerable opposition.
The report says of the theatre: "The facility is relatively well used . . . however, this is now a commercially operated facility offering limited community use and very few daytime activities.
"It has an inflexible auditorium unsuitable for other uses and it would be impossible to retain this facility if the other leisure facilities within the building are to be demolished."
Critics of the idea - proposed by consultants SQW/BBP - fear a promise to replace the Forum's theatre with a new venue may come to nothing.
The report says: "The consultants have taken the view that, whilst it would be desirable to relocate the theatre to an alternative site within Billingham, there is insufficient evidence to justify Billingham as the definite location."
Council officers are recommending the authority ignore this advice, however. They want the scheme to go ahead only after a new "theatre-type facility" has been agreed. It is proposed the new building would need moveable seating for up to 1,200 people so the venue can be used for concerts and conferences.
Harry Davies, chairman of the town centre regeneration sub-committee, said: "The Forum was seen as a 20-year project that would be continually refreshed and updated, but that has not happened.
"It is now past its sell-by date and if nothing is done it will be out of action in five years, so it does need to be replaced."
However, Jim Vaughan, a former councillor for Billingham, said: "It's essential we retain a theatre - it's part of the town's heritage."
And theatre boss Derek Cooper said: "We've been kicked in the teeth." Mr Cooper, his wife Liz and business partner John Davey set up Riverside Promotions in 1997 to run the theatre, which was on the verge of closure.
Mr Cooper said: "Our weekly attendances are better than most football clubs in the region. I understand the attraction of flattening this site and putting it to retail commercial use, but it will leave the entire area of Teesside without a proper professional theatre."
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