Workers at The Old Market, an arts venue in Hove, were told today they are out of a job.

Employees arrived this morning to begin clearing their belongings after being told of the redundancies.

Their bosses have been in crisis talks about funding a £1.4 million debt.

Trustees are still working to stop the venue from closing but have given staff notice to quit.

One, Hove MP Ivor Caplin, met Peter Hewitt, chief executive of the Arts Council of England, in a last-ditch attempt to secure financial help.

Robert Minton, chairman of trustees, said: "We won't have a final outcome until after Christmas.

"At the moment we are making contingency plans and we have had to give notice to our staff because we are a trading company which needs to do that.

"We will be having a domestic meeting today to go through our commitments and whether we will be able to re-employ any of the staff.

"We are determined we shall survive."

Mr Minton said it was hoped commitments such as weddings and events that had been booked would still go ahead.

The Old Market is also used as a base by a number of businesses and community groups which rent offices there.

Management consultant Jeff Rodrigues said: "From my point of view I will be paying more than £15,000 a year, including a £3,000 service charge for services I don't receive.

"Most of the community groups or organisations here like Brighton and Hove NHS Trust probably won't be able to afford to stay here.

"I feel most sorry for the staff at The Old Market. The management knew the situation a month ago.

"They should have told the staff then that they would be made redundant, instead of leaving it until just before Christmas."

The Old Market, which is used for concerts, shows, parties and wedding receptions, was launched in 1995. A trust was set up to manage the building's restoration with almost £6 million of public money and private donations.

Restoration work began in 1997 after the project was granted £3.9 million National Lottery cash.

But the project ran into financial trouble almost straight away and had to be bailed out by Brighton and Hove City Council last July. The council loaned the organisation £275,000 on the condition a financial expert joined the board.

A secret report suggested it was in financial difficulties and its main creditor, builders Bovis, would seek a winding-up order if it was not paid.

But the trust still owes £1.4 million and was hoping the crisis talks would help it secure funding to reduce the debt, as well as an annual £100,000.