Clwyd Theatr Cymru in Mold owed Flintshire council nearly �1m.

This is a major announcement which will hugely benefit the ratepayers of Flintshire

Alex Aldridge Council leader

Councillors inherited the theatre from Clwyd County Council after the introduction of unitary authorities in Wales in 1996.

Workers managed to reduce the �560,000 debt through a series of cash-cutting measures which included making a small number of administration workers redundant.

A mobile theatre was also introduced to tour the country in a bid to raise extra revenue.

However, the assembly has now awarded a special grant to the local authority to wipe out the remaining money owed.

In April 2000, the theatre - which is widely regarded as the National Theatre for Wales - was asked to reduce its annual budget by �200,000.

The council partly funds the theatre

Since then, the theatre's artistic director Terry Hands has worked closely with the council to improve its finances.

An action plan was introduced to reduce the �900,000 bill, and the complex is now in a more secure financial situation.

Clwyd Theatr Cymru currently receives two-thirds of its funding bill from the Arts Council of Wales.

Flintshire council makes up the one-third shortfall.

Terry Hands has constantly challenged ministers to ease the funding crisis for the arts in Wales.

Secure future

He has claimed regional theatres in Wales receive less financial help than those over the border in England.

Officials met with the assembly in September to discuss the outstanding �560,000 debt and future options for the management of the unit.

Margaret Hanson, Chairman of the theatre's Board of Governors welcomed the assembly's intervention.

"This is brilliant news for the council and compliments the work of the theatre in repaying some of the deficit and now secures its future," she said.

Council leader, Alex Aldridge said the payment of the debt would benefit local people.

"Flintshire inherited some of the theatre's financial pressures and much work has been done over recent years to bring improvements to its budgetary position.

"This is a major announcement which will hugely benefit the ratepayers of Flintshire," he added.