Blackpool Council and taxman are the biggest losers from Funny Girls' fall into administration

The company fell into administration owing the business rates on its Queen Street complex.

The company also left a debt of £723,007, owed to the tax man, as well as £2,410 to Blackpool’s Pubwatch scheme and £8,300 to Blackpool Business Improvement District (BID).

They were among a raft of creditors bills left unpaid. Administrators KPMG said “unsecured claims” total £1.4m, with funds highly unlikely to be raised to repay them.

Lancashire brewing group Daniel Thwaites, which had lent the cabaret bar and nightspot empire money over the years, took over the licence in September to keep the premises open for staff and customers.

Bookings are being honoured and Christmas and New Year shows will go ahead.

The report said the business had suffered in recent years due to “changing market conditions in Blackpool town centre” which had led to fewer visitors. This, it added, “was compounded by a licence suspension at Flamingos that also hit the overall turnover”.

A winding-up petition from HMRC on June 11 for months of unpaid VAT was deferred until September 5.

The report said that, to protect its position after making £4,3m in loans, Thwaites sought the appointment of an administrator with the consent of Funny Girls’ founder Basil Newby.

The business is up for sale but Thwaites has said it will take stewardship if no buyer is found. The administrators say the book value of the business is £4.1m but fear it may realise £3.36m.

Simon Blackburn, leader of Blackpool Council, said: “Unfortunately it is a fact of life for local authorities and businesses that when their debtors go out of business or pass away money simply cannot be collected.

“We do not want to write off debt and our specialist team actively pursue debtors using rigorous recovery procedures. However in cases such as these we are left with no other option.”