Wales’ Millennium Centre is to have £13.5m debts ‘wiped out’ and to benefit from having treble it’s current annual funding - rising from £1.2m to £3.7m.

The Welsh Assembly government has agreed the deal for the £106m arts venue in Cardiff Bay, which has been struggling to deal with its overdraft and a funding gap.

Heritage Minister Rhodri Glyn Thomas told members that the historic debt would be written off with unspent funds in the assembly government's coffers.

Mr Thomas said the rescue would not be at the expense of other arts projects.

A government guarantee of the debts had been due to expire next month.

The centre's auditors had warned that its ability to continue as a going concern was in doubt.

But Mr Thomas said the arrangement would "not be at the expense" of the arts budget or the arts outside Cardiff, as each of the cultural organisations he was responsible for would receive an increase in funding.

He said the £106m venue had attracted more than a third of a million paying customers in each of its first three years.

"It has succeeded in growing the audience for cultural events by attracting customers from all over Wales.

"I am pleased to announce today that the finance minister has agreed to pay the £13.5m loan that the project received from HSBC.

"We are also increasing the annual recurrent revenue funding from Government by £2.5 million to £3.7m next year and succeeding years to financial year 2010-2011."

He said it would bring "greater financial security" to the centre and would "safeguard the future of the widely recognised and respected institution".

Meanwhile, Shadow Culture Minister Paul Davies said: "We cannot be expected to bail out the centre every few years, especially using public money.

"The WMC must stand on its own two feet or it runs the risk of becoming Wales' answer to the Millennium Dome".

"We are also committed to ensuring other arts projects are not penalised as a result of more public money going into the centre," he added.

(BMcC)