By Julian Whittle

Last updated 12:30, Wednesday, 06 August 2008

Carlisle's Liberal Club in Lowther Street will shut unless a buyer comes forward within four weeks.

Struggling: Has debts of £300,000

Debts of £300,000 and mounting losses have forced the club, which dates from 1881, to the brink of insolvency.

A general meeting of members has been called for Wednesday, September 3.

It will almost certainly cease trading immediately unless a sale is agreed beforehand.

At least one potential buyer is in talks who, it is understood, would continue to run the club for the benefit of its 1,996 members.

Daryl Warwick, corporate recovery and insolvency partner at Armstrong Watson in Carlisle, has been called in to advise the directors.

He said: “Despite their best efforts, I can confirm that Armstrong Watson has been instructed to assist the directors in placing Carlisle Liberal Club Ltd into a members’ voluntary liquidation.

“Unfortunately, the club has extensive debts approaching £300,000 and has been losing on average £40,000 per year.

“This financial position is unsustainable.

“There is no other option than to wind up the business before it becomes insolvent and unable to pay its debts.”

He added: “We are in the early stages of discussing the club’s sale to an independent purchaser and we expect to have more concrete information ahead of the members’ meeting on September 3.”

Mr Warwick invited other potential purchasers to contact him through Armstrong Watson, on 01228 591000.

Carlisle Liberal Club underwent a £250,000 refurbishment in 1999.

The extent of its financial problem is revealed in the latest accounts for 2007.

These report a loss after tax of £37,063, following a £9,657 loss in 2006. There is also a substantial bank loan, secured on the building, which will require repayments of £400,000 over the next five years.

Two directors resigned last month, David Mostyn on health grounds and chairman Richard Dodds for “personal reasons”.

Mr Dodds has been replaced as chairman by Colin Hetherington.