Sydney's Mardi Gras 'saved'

Sydney's street party goes on...

Sydney's gay and lesbian Mardi Gras celebration may go ahead next year after all following a deal to save it from financial collapse.

Creditors on Monday backed a deal that could see the street festival's A$500,000 (US $272,000) debts paid off.

Under the rescue package, four Sydney groups took over the Mardi Gras business and will sell off assets, including props and costumes, to repay A$350,000 (US $190,000).

But the plan will depend on strong support from fundraisers and volunteers.

Paid staff are to be replaced with volunteers to organise next year's festival, and fundraising events will be held, said Michael Woodhouse, co-chairman of the New Mardi Gras.

The first fundraiser, the annual Sleaze Ball, is taking place this weekend.

Travel slump

The 25-year-old Mardi Gras started as a gay rights protest march but evolved into a massive street festival that attracts more than 120,000 visitors and brings Sydney business worth tens of millions of dollars each year.

Mardi Gras gives a huge boost to the local economy

Last year's carnival lost A$500,000 largely because of a drop in international visitors after the 11 September attacks in New York and Washington.

The state government has refused to help, saying taxpayers should not fund poor management.

An anonymous "pink knight" who had promised a A$400,000 donation, pulled out suddenly in July, forcing the festival's organisations to seek voluntary administration, the step before receivership.

The administrator, Scott Pascoe of Sims Lockwood, said the vast majority of creditors at Monday's meeting voted in favour of the new rescue package.

The New Mardi Gras board is made up of representatives from the Aids Council of New South Wales, the Sydney Pride Center, the Gay and Lesbian Rights Lobby and Queer Screen.