A cash-strapped arts venue has been forced into liquidation – but has been immediately relaunched as a new company.

The management of the Old Market, in Upper Market Street, Hove, confirmed yesterday that the charitable Old Market Trust, which has run it since its creation in 1999, had been wound up because of non-payment of tax debts of £240,000.

At the same time they announced the venue would continue to operate, with all scheduled shows still taking place.

It will be run by the existing management, who have formed a new company and will lease the building from Barclays bank, which has taken ownership as part of the liquidation.

Trust chairman Stephen Neiman said the company had a long-term hope of buying back the venue.

The winding-up means that around 40 local suppliers and other bodies owed money by the trust will be paid only a small proportion of their debts.

Mr Neiman said: "I am bitterly disappointed that there are a number of people that will suffer financially, and we apologise to all those that will lose money.

“If there was any other way of moving forward then we would have taken it.

"However, I am delighted that the staff and the management team here wish to continue operating the building and that all deposits for bookings will be honoured by the new company."

The closure follows months of warnings from the trustees that the venue was in danger of going bust and a desperate last-ditch attempt to save it by developing two glass penthouses on the roof of the Grade II listed building.

The trust said it made money on a day-to-day basis but had struggled to deal with historic debts built up during restoration of the venue in the 1990s.

Charity Commission statistics show its expenditure in the past five years has been around £1million more than its income.

The closure was finally forced when Her Majesty's Revenue and Customs pursued a winding-up order to reclaim overdue taxes.