GLASGOW'S cash-strapped Lighthouse arts centre is set to be saved from closure this week.

GLASGOW'S cash-strapped Lighthouse arts centre is set to be saved from closure this week.

Bosses of the design centre, which was the centrepiece of Glasgow's Year of Architecture and Design in 1999, are facing a £300,000 deficit after two financial blows.

Councillors are expected to agree a package of rescue measures when the executive committee meets on Friday.

The Lighthouse had expected the Scottish Government to fund the second Six Cities Design Festival, due to be held in 2010, so had kept on the team behind the first successful event.

However, Holyrood decided to pull the plug - leaving the Lighthouse with a £245,000 bill.

And the cost of mounting Scotland's first appearance at an architecture event in Venice cost £100,000 more than the £250,000 it had received from the Scottish Government and other sources.

Because the Light-house is a charity, it must clear its £300,000 debt before next April.

George Ryan, city council development and regeneration spokesman, said the government's decision not to invest in the 2010 festival had "seriously impacted" on Lighthouse funds.

He added: "The immediate difficulty facing the Lighthouse is to fund the £300,000 deficit, failing which its director will have no option other than to wind up the company and close it."

The rescue package includes converting £245,000 owed to the council into a 10-year loan, to be repaid with interest, and increasing council funding next year by £50,000 to £160,000.

The cash will be on condition the Lighthouse reviews its staffing levels and has a strategy to ensure it attracts more city residents, especially children.