Scarborough’s Futurist Theatre will close from Monday after the local council, which owns it, failed to negotiate a new contract with its current operator.
Local authority Scarborough Borough Council has agreed the venue will be boarded up for three months in the hope that potential operators will come forward to run it until a decision is made on how to redevelop the site.
If this is unsuccessful, the 2,150-seat receiving house faces permanent closure.
The local authority confirmed that the venue’s current operators, Barrie and Brenda Stead, had requested an increase in subsidy from £80,000 per year to £180,000 in 2014 to run the theatre.
However, the council said the pair withdrew this offer after deciding the financial risk to them would still be too great.
Last year a council scrutiny committee supported an earlier decision to shut the theatre if it could not maintain its current operator or find a new one.
As the council has so far failed to secure an alternative group to run the building, it has decided to shut the Futurist Theatre. Meanwhile, it has extended the lease to the Steads from December 31 to January 5 to allow the venue to screen the latest instalment of The Hobbit films.
Patricia David, from campaign group Save the Futurist, said it was now “open warfare” between the council and local people who want to see the venue remain as a theatre.
She described the situation as a “mess” and said there was no hope that a potential operator would be able to put together a viable business plan in three months.
David said the campaign group hoped the venue could be saved by convincing the council to sell it.
She said: “People are now beginning to come forward with money to buy it. The council has suggested that its market value is £335,000. That is not an unlikely amount of money for people to raise, but the sting in the tail is the cost of renovating it. We estimate the total overall cost would be around £3.5 million.”