The redevelopment of an open air theatre in Scarborough, North Yorkshire, could be taken on by the local authority if plans to remove the scheme from an existing development agreement are approved next week.

Scarborough Borough Council's (SBC) cabinet referred the proposals to the full council, which include removing the theatre project from an agreement with the company behind The Sands development in the town's North Bay area. If the proposals are approved, the area of land on which the open air theatre is situated would remain under council control, with a view to starting the redevelopment of the facility later this year.

The council hopes that the funding for the scheme would come from revenue generated by the first phase of The Sands scheme, a mix of retail and residential units that has already been completed by Benchmark Leisure. Despite the economic downturn, both the developer and the council is confident that £3.5m can be raised through the sale of the new apartments, which would in turn fund the development of the open air theatre.

Jim Dillon, SBC's chief executive, said: "The recommendations, if approved, would pave the way for the redevelopment of the open air theatre, ultimately providing Scarborough with a major, high profile attraction for all visitors and residents. "The recommendations reflect the changed circumstances that have occurred since we entered into the development agreement with Benchmark back in December 2002. We remain committed to working with Benchmark to ensure that despite the current economic climate, we continue to work hard to progress the future phases of the development."

SBC has also been asked to approve a revised masterplan for The Sands development based on the council's renewed aspirations for the site as landowner. Image: Scarborough Borough Council