THE future of the Prestatyn Scala Cinema and Arts Centre still hangs in the balance.
Denbighshire County Council has said the cinema, run by a not-for-profit Trust, has breached its credit agreement after it was revealed it would be late with its wages payment for November.
The Trust has called a public meeting for November 7 with fears the centre could close for good within days.
The possibility of a private operator being brought in has been discussed by the council, according to Trust members.
Rhiannon Hughes, chair of the Scala Trust, said: "The Scala is experiencing cashflow difficulties which have been compounded by an arrangement Denbighshire County Council has agreed with a European funder which involves the Scala but which the Scala was not consulted on.
"If we had been consulted and been part of those discussions we would have pointed out that the arrangement with the two bodies would have worsened the Scala’s cashflow situation and this has proved to be the case."
A campaign has now been launched by supporters of the Scala in a bid to raise funds to keep the centre open.
Denbighshire Council has announced plans to cut the centre's £41,000-a-year subsidy as part of £17 million of savings.
However, these cuts would not come into effect until April next year.
A spokesman for Denbighshire Council said: "The current financial situation the Scala finds itself in is immediate as opposed to the proposed budget cuts.
"We have a credit agreement with the Scala, which allows them to be two months in arrears.
"They alerted us to the fact they would most likely be late with the payment for November - this will put them three months in arrears and therefore in breach of the terms of their credit agreement.
"This would be on top of an £86,000 loan the council gave them in 2010, for which we have not asked for repayment to date.
"Clearly that poses an increased risk for the council.
"We do value the contribution the Scala makes and have given as much support and flexibility within our funding constraints as we can, recognising the importance of the facility to the community, but there is a limit to how much we can continue to support an independent organisation and still provide best value for the tax payer."
Mrs Hughes said the possibility of losing its council subsidy "does not allow for any forward planning and the withdrawal of any flexibility with the payroll".
She added: "Scala staff, board members and volunteers have all worked tirelessly to protect the town’s investment and deliver what the community planned for the new Scala.
"The Scala has also been very successful in bringing in external funding to help make up for chronic under funding of the Scala since day one and as usual we have a number of grants which have been agreed and are due in the next few weeks.
"The Scala’s performance as a cinema is also exceeding national trends.
"We are already being contacted by many community groups who use the Scala worried about what to do. As you can imagine many people feel quite desperate about the situation the Scala finds itself in as it has become a part of their lives.
"As you can imagine having worked for nine years to get the Scala built and nearly six years building up the business and the Scala’s reputation we will do all in our power to try and keep the Scala trading. If the doors do close and it could be for the sake of a shortfall of a few thousand pounds then all that effort and hard work is lost."
A location for the meeting has yet to be decided.