Royal Opera is the most bizarre plot in town

The Royal Opera House nearly went bankrupt last week, its chairman, Lord Chadlington, disclosed yesterday. MPs on the Culture, Media and Sport committee investigating the Royal Opera House may have thought there was little left to surprise them after a session last week which had one MP concluding there was "more drama backstage than on stage at the Royal Opera House."

But yesterday's evidence showed the day-to-day running of Britain's most prestigious arts institution contained shocks enough for several hours of committee business and certain exchanges left MPs reeling in astonishment. It was the best drama in town, and an expert said the plot was better than that of any opera: "Verdi would have killed for this." Lord Chadlington began by telling MPs that while redevelopment of the ROH was on-budget, "day-by- day trading remains very precarious. Our auditors, KPMG, advised the board at the end of June that our pounds 5m accumulated deficit and budget for closure in the year ahead meant that without an urgent injection of a significant cash sum, the Royal Opera House faced insolvency. It was only an eleventh-hour intervention ... by private trusts with a pounds 2m facility which has enabled us to go on trading. This must be paid back in 2000. These donors have made ... clear they will not bail us out again."

Discussion moved to the fact that the ROH was using lottery money to pay off staff. Although Lord Chadlington agreed some of the redundancy payments were large, those same staff could be back in their jobs in 18 months. They will be allowed to reapply for their old jobs when the ROH reopens, he confirmed.

The committee, chaired by Gerald Kaufman MP, moved to questions of health and appointments, asking Lord Chadlington and a fellow board member, the publisher Robert Gavron, about the circumstances of the resignation, due to ill- health, of chief executive Genista McIntosh in May and her replacement by Mary Allen, then secretary of the Arts Council, the ROH's funding body, without the post being advertised. Mr Kaufman said: "How is it that the day after Genista McIntosh left the Royal Opera House because her health had deteriorated, she was leading a scrutiny team to the Nottingham Playhouse? It seems to me her health fluctuates."

He also challenged Lord Chadlington on the latter's statement that Ms Allen had asked him not to discuss her job offer with the Arts Council chairman, Lord Gowrie, as it would be inappropriate. Mr Kaufman said: "What on earth was Mary Allen up to telling you it was inappropriate with you to be open with the man who is your principal funder. Why on earth did you pay attention to that?" Lord Chadlington replied: "I could see she was in a difficult position."

Mr Kaufman said: "I must say the whole thing strikes me as utterly bizarre, that she, an employee of the Arts Council, lays down the terms for leaving the Arts Council behind the back of her chairman."

Mr Gavron said it never occurred to him to question Ms Allen, to which Mr Kaufman retorted: "You seem to have been afflicted with naivete."

Mr Kaufman then gave vent to the committee's shared feelings of bewilderment that five hours of questioning ROH management had produced.

He said to Mr Gavron and Lord Chadlington: "All appointments to the board of the Royal Opera House are made by the board. You decide who is to be chairman. You're kind enough to give the name to the Prime Minister and the Culture Secretary. You say the Arts Council may offer suggestions. Big deal! And you say an extra pounds 5m will turn this into a people's opera."

The hearings continue in autumn.