Scarborough Borough Council (SBC) has approved in principle proposals to take over responsibility for the redevelopment of the resort's open air theatre in order to ensure the scheme goes ahead despite the downturn.

The revamp of the theatre is currently included in a development agreement with Benchmark Leisure, which was appointed by the council in December 2002 to transform 55 acres (22.3 hectares) of land in the town's North Bay area into a major tourist destination. Funding for the open air theatre scheme had been expected to come from the sale of residential units at The Sands development, but the recent decrease in property values now means that Benchmark is currently unable to meet all of the costs involved.

As a result, the council will now look secure a £3.5m loan in order to progress the scheme itself, and will also seek to appoint an operator for the venue. It is hoped that construction work can begin in September, with the theatre ready to open in Easter 2010. However, the council last week insisted that the proposals do not mean that Benchmark is being forced to withdraw from the scheme altogether.

David Archer, SBC strategic director, said: "This does not mean in any way that Benchmark are no longer committed to the scheme or that their financial position is in question. "Benchmark's funder, Royal Bank of Scotland, has already agreed to ongoing support. The council and Benchmark will continue to work together, and in doing so, give yet another demonstration of why Scarborough is Britain's most enterprising place."

Image: The way it was – an image showing a production of The Desert Song at the Theatre in 1952