A COUNCIL leader has called for a crisis meeting to investigate how the town's cinema closed with spiralling debts less than a year after opening.

Hyndburn's Coun Peter Britcliffe said there were questions to be asked in the aftermath of the shock announcement.

It has emerged that the operators originally set to run the complex, London-based Metroplex, sold their interest in the town centre cinema to GSX Leisure Ltd before it opened last November.

Site owners Globe Enterprises -- in which the council has a one third stake -- have admitted that vetting of Somerset-based GSX was not as stringent as it had been into Metroplex.

And the council was today urged to reveal whether it knew in advance the company had no previous experience of running cinemas.

Operators GSX put the business into voluntary liquidation on Tuesday saying they couldn't afford the £150,000-a-year rent, and ticket sales had been lower than anticipated.

Labour's shadow environmental health portfolio holder, Coun Tim O'Kane said he wanted to know whether the company had been properly researched: "I will be asking whether the council knew GSX had not run cinemas before, and if not why not."

Simon Hulse, chairman and finance director of GSX, said the four-screen town centre facility would only generate 100,000 ticket sales instead of the 130,000 expected.

Coun Britcliffe said: "I intend to meet with the head of paid services and the Globe Enterprise board regarding this."

Nigel Rix, a director with Globe Enterprises, which is also made up of Nelson-based Barnfield Construction and local businessman Stuart Nevison, said the company had taken a seven-figure loan for the £3.5million Viaduct development.

"Originally we entered into a contractual agreement -- a 25-year commitment -- with Metroplex. On the back of that agreement before the development commenced Globe Enterprises secured a substantial bank loan. They had to be thoroughly checked in all the normal ways because of the requirements of our bankers. This sort of agreement isn't lightly entered into."

He added: "We were given an assurance by Metroplex and by GSX themselves that the directors of GSX were people of substance with a strong business background.

"There was some vetting of GSX but under the law the tenant contract transfers so the landlord's role in this is relatively in the background."

Labour's Coun Ian Ormerod, council leader when the cinema opened, expressed his fears about the venture months before it opened, saying he feared it would become "the biggest white elephant in history" after the project was dogged by a series of setbacks and delays.

Jean Battle, who took over as Labour leader following their election defeat in May, said: "I would have thought they would have vetted GSX as much as Metroplex, and investigated them to make sure their finances stacked up because at the end of the day it's public money being used."