Zap Productions, the organiser of some of the biggest events in Brighton, is being wound up in a row over a £200,000 debt.

The company, which sprang from the success of the famous seafront Zap Club, decided to quit after Bradford Council called in the debt, accusing it of reneging on a deal to organise an international festival.

Creditors have been called to a meeting by company directors to discuss the voluntary liquidation of assets.

Zap Productions has organised the successful Streets of Brighton Festival, Brighton and Hove's Millennium New Year celebrations, the city's first Party in the Park and many other major events across England.

Problems began earlier this year when the company became embroiled in a row with the Yorkshire council over a three-year deal to run the Bradford International Festival.

The company delivered the 2002 and 2003 festivals, which included the famous Asian Bradford Mela, but the council was unhappy with the organisation of some of the events and asked for its money back for the 2004 festival.

Councillor Anne Hawkesworth, executive member for arts, heritage and leisure in Bradford, said the council requested a mutual agreement to terminate its contract to deliver the 2004 Bradford International Festival and Zap Productions agreed.

The council stepped in to organise the festival instead.

A dispute then broke out over the £200,000 debt which the council claimed it was owed for part of the deal in the final year of the contract.

Zap Productions denied it failed to deliver a well-organised festival and says it does not have enough assets to cover the disputed £200,000.

A Bradford Council spokesman said: "We are seeking to recover money that is owed to the authority."

Neil Butler, who had been appointed Bradford International Festival Director for Zap Productions, said: "We put in place a significant and exciting programme for 2004, which was delivered by council officers.

"The decision was reached by mutual agreement as we believed that it was the best way to help secure the long term stability of the festival.

"We feel we have been very badly treated by Bradford Council.

"Staff were leaving and we kept on having to deal with different people. As far as I and independent scrutineers are concerned, we delivered and within budget."

Jane Glaister, director of arts, heritage and leisure at Bradford Council, said: "An advisory board chaired by Baroness Lockwood, chancellor of Bradford University, was set up to oversee the festival.

"This board was in place during Mr Butler's contract with the council.

"Although the council's previous chief executive left last year, the assistant chief executive took over immediately.

"The assistant chief executive and myself had overall responsibility.

"The winding up of the festival contract, which was at Mr. Butler's request, was subject to terms and conditions but he decided to close the company down before we had time to agree them."

The winding up of Zap Productions, which is expected to be completed in the next two weeks, will not affect the running of Brighton's Zap Club, which is under new ownership with Zap Art.

Dave Reeves, a company director who set up Zap Productions 16 years ago, said he was angered by the closure of the venture.

He said: "I am very sorry it has happened in this way.

"We are proud of what Zap Productions has achieved and I cannot understand why Bradford Council is pursuing us in this way.

"We deal with councils up and down the country, including London boroughs and Brighton and Hove City Council, and never have the problems we do in Bradford.

"Zap Productions had done little in the past two years. We were going to keep it ticking along but now thanks to Bradford Council it will have to cease."