An arts project, which was forced to close after amassing debts of �750,000, could be resurrected within months.

Stockton Borough Council has heard proposals for a new company to take over the running of Arc.

The company will have charitable status and would start without the capital debt and disputes of the old Arc centre, which opened in January 1999 offering cinema, comedy, theatre, music and restaurants.

It is hoped the new model Arc will be less dependent on ticket sales, with greater emphasis put on learning and building links with companies and colleges in the area.

'Important initiative'

The renamed building is likely to be operating in some form by next February.

Mark Mulqueen from Northern Arts told BBC Radio Cleveland: "We've had 11 months since Arc's trust went into liquidation.

"We hope next month the liquidator will hand the building over to the new company... that means we can go forward."

Councillor Alex Cunningham, from the council, said: "This in an extremely important initiave... the local authority are fully behind it.

"We need to leave the past in the past and look forward to the future."