Visitors to the website for The Light House cinema in Dublin’s Smithfield were today greeted with a stark message: “Light House Cinema is now closed. On behalf of all of the former staff of the cinema, we would like to sincerely thank everybody who has supported us over the last three years.”

The statement came following a decision by the High Court to wind up the cinema due to its inability to pay rent to John Flynn of Fusano Properties. That rent had recently risen from €100,000 to €200,000 per year.

Neil Connolly, who co-managed the cinema with Maretta Dillon, commented: “We were surprised that our exhaustive – and exhausting - attempts to reach a settlement with the landlord were unsuccessful. We made serious attempts to negotiate. We even suggested mediation. We are amazed that no flexibility whatsoever was on show.”

Speaking to The Irish Times, Mr Flynn said he required the funds to meet obligations to the National Asset Management Agency (Nama). Mr Connolly admits the increase was part of an agreement signed before the cinema opened in 2008.

“If there is any criticism due to us it is that we signed up to the deal in the first place,” Mr Connolly said. “In hindsight, it doesn’t look like a very sensible thing to have done in 2007. When we signed up to this, Smithfield, as imagined, was to become an entirely different place.”

The cinema, saddled with outstanding rent payments of €156,856, is yet another body ruined by deals done during the years of prosperity. In 2008, when The Light House opened, it still seemed possible that the Smithfield development might become a thrusting up-market area.

The relative failure of that dream - business premises lie empty; the huge vainglorious gas lamps no longer burn - was surely an important factor in the complex’s ultimate winding-up.

That noted, the closure comes following a period when the cinema has had notable hits with such films as The King’s Speech, True Grit and Black Swan. More impressive still, over recent months, The Light House has seen Xavier Beauvois’s Of Gods and Men, a French film concerning monks in North Africa, evolve into an unexpected cult smash.

“Things have been getting much better,” Connolly said. “We’ve cut costs steadily. We’ve been growing the audience. The first months of 2011 were a lot better than 2010. The financial position was improving, but we could never get to point where we would be able to pay €200,000 in 2011.”

The original Light House Cinema, enthusiastically run by Connolly and Dillon, opened on Abbey Street in 1988. From that time, until its lease ran out in 1996, the cinema was instrumental in allowing audiences to enjoy the work of such emerging talents as Terence Davies, Ang Lee and Jane Campion. Cinemagoers will remember an old-school, intimate arthouse cinema, very different from the gleaming, beautifully appointed building designed by DTA architects for Smithfield.

Yawning uncertainty greets the future of the venue, which has received close to €2 million in public funding. Planning permission dictates that the building must remain an arthouse cinema. Mr Flynn has claimed that two cinema operators have approached him with a mind to taking over the venue.

It received grants totalling €1.75 million from the Department of Arts and the Cultural Cinema Consortium, a joint initiative of the Arts Council and the Irish Film Board.

In a statement published on its website, Connolly and Dillon confirmed the cinema had closed with immediate effect and thanked cinema-goers for their custom over the past three years.

The court today heard there was an outstanding rent of €156,856 and the company was now insolvent and unable to pay the debt.

The building comprises a four-screen, 600-seat "cultural cinema" and was set up with the aim of presenting a diverse and individual programme of the best Irish, independent, foreign-language, arthouse and classic cinema.