MUSEUMS Sheffield will still be expected to try to repay £1.7 million lent by Sheffield Council over the past three years.
The council’s chief executive John Mothersole said officers had planned for not receiving any of the money back to ensure their budgets balanced.
But he said the council did not want to write off the debt.
The Trust, which runs Sheffield’s museums and galleries, ran up the debt after it under-estimated the running costs of the refurbished Weston Park Museum.
It also had to cover a funding gap when payment of a Government grant was changed from in advance to retrospectively and the cost of its exhibitions programme went over-budget.
Mr Mothersole said: “The council sees Museums Sheffield as an independent organisation and, as such, it has to manage its own costs.
“We are working with them to ensure stability but have not agreed to write off the debt.
“Provision has been made for such an action in case it is not repaid, so we can plan our finances effectively.
“However, I would expect any surpluses from their budget to be used to help repay the loan.”
Museums Sheffield is set to make a slight surplus in 2010/11 and bosses say the Trust has cut costs over the last two years to ensure it is no longer overspending.