Stewart's venture is thorn in his side

EURYTHMICS pop star Dave Stewart had sweet dreams of founding his own entertainment empire - but they have turned into a nightmare. His Artist Network business has run into cash problems little more than a year after it was set up.

The bearded guitarist, who shot to fame in the Eighties alongside singer Annie Lennox, wanted to challenge the mainstream music industry.

Artist Network aimed to give performers more creative freedom and higher royalties than conventional record companies. Despite the initial support of big names such as Anita and Gordon Roddick, founders of The Body Shop, Stewart's plans failed to materialise.

The company lost £316,965 last year and has two county court judgments against it for a total of £16,393. Its debts top £2m and it is operating under a 'voluntary arrangement' - a deal with creditors allowing it to avoid collapse.

Stewart runs his business interests through several companies. They include DNA Ltd, a profitable venture he jointly owns with Lennox to manage income from the Eurythmics.

There has also been speculation over the future of The Hospital, a hi-tech arts centre in London's Covent Garden masterminded by Stewart and his friend Paul Allen, co-founder of software giant Microsoft.