Malton'S cinema has hit a financial iceberg and gone under... days before it was due to screen Titanic.

A message on the Palace Cinema's answering machine informs customers that it closed on Thursday.

The cinema above The Lanes shopping mall, off Yorkersgate, was due to start screening Paws and In & Out yesterday.

Staff there had been expecting bumper audiences when the blockbuster movie Titanic docked in Malton next week.

David Hepworth, director of Palace Cinema (Malton) Ltd and Huddersfield-based associate company Screenworks Cinemas, said the closure decision was forced on them because of financial problems.

"Going over on Thursday night and telling the staff was the worst thing ever because there's a bloody good team in that building."

Mr Hepworth confirmed that the Malton firm had been put into liquidation following a members' meeting, but said: "We are actually trying to sell it on as a business."

The 142-seat Palace Cinema, whose entrance is tucked away in a side alley, enjoyed its most successful year for a decade in 1997.

Films including Evita, The Full Monty and The English Patient attracted more than 42,000 people, even though the cinema was closed for two months after an electrical fire in March.

According to Mr Hepworth, support had not really waned since then and they had been attracting more teenagers and young couples.

But a sister company in the Screenworks group "went down" last year and, more recently, another offshoot was hit by the opening of a multiplex cinema.

Mr Hepworth said: "It has been a hard blow to all of us, and it will be to the community. But we already have interest from five parties for taking it over as a business and keeping the cinema at the heart of it."

He added: "We're hoping to get the sale completed in time for it to be up and running again for Easter."

Cinema-goer Anne Corner, of Hunters Way, Norton, said: "I just think it's a real shame when they were doing so well and they have to close through no fault of their own."

In December, 1996, it was announced that the Palace Cinema would close and the manager and eight other employees would lose their jobs.

But the owners responded to public pressure and gave it one last chance. It reopened after three weeks in the dark.

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