The Pride gay festival made a loss of more than £11,000 last year, which added to the organisation's misery following the disappearance of £10,000 from its funds.

The committee which organises the annual event has spent recent months holding fund-raising events in an attempt to recoup losses and raise money to pay the promised grants.

According to an audit carried out by Chisnall Comer Ismail and Co and published yesterday, Pride had a turnover of £170,168 in the trading year 2002/2003.

The 2002 festival cost £140,472 to host and there were expenses of £41,342 which included staff salaries, printing costs, phone, legal costs, insurance and performing rights.

That left the Pride bank balance £11,646 in the red. To compound the problem there was a loss of £2,506 from the previous year, which meant the bank balance slipped further into the red to leave a total deficit of £14,152.

The organisation runs the annual free one-day festival through donations, membership and sponsorship.

During the day of the festival, volunteers collect money which is divided among charities. The audit discovered only £1,500 of that promised £10,000 had been paid out.

In recent weeks the Pride in Brighton and Hove Committee has been working overtime to clear the debt and raise enough money to pay outstanding grants.

It held a day at Brighton racecourse, a Weakest Link competition, a dog show in East Brighton, and a dinner event at Topolino's restaurant in Hove.

Martyn Roberts, treasurer of Pride in Brighton and Hove, said the recent events had raised enough money to enable it to honour the grants. The cheques were being sent yesterday.

It is hoped after this year's event, next Saturday, the bank account will be back in the black and it can move forward in future years.

Mr Roberts said: "From the event this year, as long as all the sponsors and concessions come up that we've got on board, we're not going to make a huge profit because we will be clearing everything up.

"It's a mopping-up operation."