Government funding of a Galway-based art house cinema should be suspended temporarily during a Charities Regulator Statutory Investigation, RTÉ's Prime Time has been told.
Fianna Fáil spokesperson on Arts and Heritage Niamh Smyth told the programme if she was the minister responsible she would hold back any more funds until satisfied the investigation is finished.
"I would pause for a moment - wait for the outcome of that and then hopefully in the future, all being right and well, be able to move the project forward and of course, without delay, get it open," she said.
The regulator said "issues have arisen in relation to the proper treatment of the charity's assets in a commercial arrangement proposed with a new investor".
Tonight's Prime Time revealed that transaction in question was the reassignment of a lease for the art house cinema to production company Element Pictures.
The building was transferred over to Element in December despite the regulator issuing a caution to Solas about the proposed transfer.
As a result of the transfer, Element Pictures, a private company, is now in control of a building which was funded entirely by public funds.
Galway City Cllr Michael Crowe said "this is in effect a private entity - it will be run for profit."
He continued: "What has happened here in Galway is that the public have paid €8-9m for a building to be handed over to a private operator."
He described the project as "an unbelievable fiasco", which he said had been, "dogged by saga".
The programme also revealed the contents of correspondence between Element Pictures and Galway City Council in the lead-up to the lease being transferred.
In the correspondence from October 2016, Director Andrew Lowe told the council that Solas Picture Palace is facing liquidation and he tells the Council that the Solas board is ready to "pull the plug".
He also referred to the fallout from Prime Time's revelations about the project last September and says the "frankly perplexing slow pace of progress" could mean that "the whole transaction will grind to a halt", referring to the reassignment of the lease and the council's efforts to secure a valuation on the property.
A spokesperson for Minister for Arts, Heritage, Regional, Rural and Gaeltacht Affairs Heather Humphreys said that "funding is continuing as per agreements reached with Galway City Council and other partners".
This is despite the fact the charity behind the project is the subject of a statutory investigation by the Charities Regulator.
