Financial difficulties will see a £200,000 council bail-out and job cuts at leisure centres.

Hyndburn Leisure will need to make savings of around £320,000 after a downturn in users and rising costs over the past year.

The cuts will come from reduced staff levels, negotiation of staff terms and conditions and possible reduced service at Hyndburn and Mercer Hall leisure centres.

The council has agreed a two-phase recovery plan giving £100,000 to the trust by the end of this month.

In a report to go before councillors at a scrutiny committee next week, the plan is described as ‘creating a leaner, more effective trust’.

The first phase will see savings of £220,000 made coming predominantly from staff reductions.

In phase two a further £100,000 of savings will be made to allow the trust to pay back the debt to the council over the next 10 years.

In January the trust posted its 2009/10 annual accounts, recording losses of over £136,000 on income of £2.7m. As at March 2010, the trust also owed the local authority £350,000.

Michael Hunt, trust chief executive, said: "We needed to see how we could get into a stronger financial position and we came up with these savings.

"Last year one of the big issues was the weather and the general doom and gloom. We had a drop off in attendances and it did affect our income.

"However, in the beginning part of this year the new health spa at Mercer Hall has had a fantastic impact on membership across all our centres.

"There are no reductions in opening hours, no changes in activities and no businesses closing."

The £320,000 savings come after council chiefs have to find £2.6m in their budget savings. The trust, which operates services such as Oswaldtwistle Civic Theatre, the town hall and tourist information, as well as three leisure centres, has now seen its council grant slashed by 25 per cent in the space of two years.

Mr Hunt added: "We are working in partnership with the council who are coming to help us out. They wouldn’t do that without a financial plan and we are comfortable we can repay it over a period of time.

"Leisure trusts across the country are up against it."

Peter Britcliffe, council leader, said: "We have always supported the leisure facilities in the borough and it is something that has always been subsidised.

"We are committed to creating a healthy population and we are happy to continue to provide funding but I think everyone acknowledges we are operating in difficult times."