HARINGEY Council has leased Crouch End’s iconic 1930s Hornsey Town Hall to a theatre school at a peppercorn rent of �1 for the next 125 years.

At a cabinet meeting on Tuesday night, Labour councillors agreed to lease the grade II*-listed building to the Mountview Academy of Theatre Arts.

Under the terms of the agreement, the drama school – which offers courses for undergraduate and postgraduate students and a range of education projects – will be responsible for the running costs of the building, estimated at between �250,000 and �300,000 a year.

The council will still own the building but Mountview will be responsible for the costs of restoring, refurbishing and developing it. This is estimated to cost �19million in total, some of which the school will raise through fundraising.

This means that ambitious plans to transform the town hall, approved by the council last December, have been put on ice.

Instead, the school is expected to make a fresh planning application in October. The revised plans are expected to include 78 residential units instead of the 123 given planning consent last year. The percentage of affordable housing will remain the same.

The council has already invested �2million in the project, largely as a result of the planning application. But in a report published ahead of the meeting, the corporate resources director explained how the Hornsey Town Hall Creative Trust – which has been involved in the project since 2007 – had warned it would need financial support from the council for at least the first few years of the venture, which was not viable in the current economic climate.

Finance boss Cllr Joe Goldberg said: “Together, the council, the Hornsey Town Hall Creative Trust and Mountview have agreed a plan which meets their shared aims and is an exciting vision for the future of Hornsey Town Hall.

“The building itself will be beautifully restored and cared for, Mountview will be back at its home in the heart of Crouch End, there will be community access, a fantastic arts programme and an influx of students and visitors which will bring vibrancy and culture to the area. It really is a complete package.”

Crouch End Lib Dem councillor Lyn Weber welcomed the decision to lease the building to a not-for-profit arts company.

She said: “If this makes the town hall viable, I think it’s a fantastic idea. Mountview is currently in Wood Green but it used to be on Crouch Hill and it’s well known in the community. One of the key points is that the town hall doesn’t deteriorate any further and, in this economic climate, I imagine that many of the alternative plans have fizzled out.”

The Hornsey Town Hall Creative Trust has also backed the decision. A spokeswoman said: “There has to be a sustainable business plan for the town hall – something that generates enough revenue to keep it going. This option gives it a sustained business plan and guarantees access to the public.

“We’ve said from word go that there has to be a business case.”