Sun sets on Hackney Empire

The Hackney Empire, the theatre which TV star Griff Rhys Jones helped restore, will close next year in an attempt to clear massive debts.

Simon Thomsett, its artistic director and chief executive, has left and a troubleshooter, Clarie Middleton, has been named interim chief executive to sort out a financial crisis that has escalated since the venue re-opened in 2004 after a £19.5 million refurbishment.

A debt of more than £1 million from the rebuilding work has been made worse by an operating deficit.

The Grade II listed theatre will continue to operate a full programme until the end of its pantomime, Aladdin, on 9 January. The main stage will then go dark for six to nine months, leaving most of the 30 full-time and other casual staff out of a job. Education and community work will continue.

Ms Middleton refused to discuss the size of the debt, and said performances had to stop while bosses worked out a rescue plan as they were the most risky part of the operation. "The business as a whole is not working. Unfortunately there will be redundancies as with reduced activity we will not need as many staff." Ms Middleton has worked at the Exeter Northcott Theatre and the Bristol Old Vic which faced similar difficulties.

The Arts Council in London, which funds the venue, said: "The intention is that by 2011 there will be a reinvented Empire. The borough of Hackney and ourselves are really impressed by the plan the board has come to us with."

The venue has received millions of pounds of public and private support, including £1.3 million from Lord Sugar in 2001.

The restoration led by Rhys Jones — who gave about £250,000 — included £3.85 million from the Heritage Lottery Fund, £5 million from the Arts Council and £3 million in urban regeneration cash. The theatre receives an annual Arts Council grant of £385,000 and up to £150,000 from Hackney council. It was intended that building debt would be offset by the sale of an adjacent building, but this remains unsold.

The Empire is regarded as one of the best theatres designed by Frank Matcham, who also built the Coliseum. It opened in 1901 and has hosted stars from Charlie Chaplin to Ralph Fiennes.