The future of a famous cinema that has fallen into disrepair remains uncertain after two major deals fell through.

Businessman Mike Holland had hoped to sell the Astoria, in Gloucester Place, Brighton, to a consortium led by Dragons’ Den entrepreneur James Caan, who wanted to turn the Grade II listed building into a hub for small businesses.

Another buy-out, led by West End and Broadway writers, to transform the venue into a recording studio and performance space, was also put forward.

But the first proposal has now been dropped and the second is on the brink of collapse.

Phil Graves of Graves Jenkins, estate agents for the sale, said the credit crunch had affected both deals.

He said: “This is one of the last empty landmark buildings in Brighton which will not be turned into luxury apartments.”

Mr Graves called for Brighton and Hove City Council to take a more active role in tackling empty properties.

He said: “We are all members of the Brighton community and the council needs to play a major part in looking back at what happened in the recession of the 1990s, when we had many vacant commercial buildings and working so that does not happen again.”

A council spokesman said: “The credit crunch has affected the whole of the country. In Brighton we are drawing up plans to steer the city’s businesses through these difficulties and will be making an announcement shortly.”

The Astoria was at the heart of Brighton life for decades and people have campaigned for it to be restored to its former glory.

Hopes of redevelopment have been raised and dashed. It was saved from demolition in 2000 but a proposal to reopen it as a cinema and concert venue was scrapped.