A popular art house cinema in Bury St Edmunds will be sold following a decision by the Competition Commission.

Hopes are high that a popular art house cinema in Bury St Edmunds still has a future despite the announcement it is to be sold.

Yesterday, the Competition Commission revealed Cineworld will have to sell one of the two cinemas it owns in the town: the multiplex in Parkway or the Abbeygate Picturehouse in Hatter Street.

And Cineworld has said as a result of the watchdog’s final decision it “reluctantly” intends to sell the Abbeygate Picturehouse, which offers niche screenings as well as mainstream films.

The commission has concluded Cineworld’s acquisition of City Screen Limited, which runs the Picturehouse chain, could lead to a substantial lessening of competition in three areas - Bury St Edmunds, Cambridge and Aberdeen - which could lead to higher prices for cinema goers.

Pat Church, who has managed the Hatter Street cinema since 1975, said he was “definitely” confident the cinema would be able to continue in essentially its current form, adding there are “interested parties in the wings”.

Lyn Goleby, managing director of Picturehouse and one of its founders, said: “I expect there to be interest because it’s in very good shape. It’s a very healthy business.”

The Abbeygate Picturehouse has faced challenges in the past - it came close to closure when it was known as Hollywood Cinema - but its fortunes were seen to be on the up following a major refurbishment costing up to £1million and the acquisition by Cineworld.

Mrs Goleby said she was “absolutely gutted” at the commission’s decision, adding the multiplex and Picturehouse in Bury are completely different operations.

Mr Church said: “The financial security has gone - that’s the worst thing about it. Really we have been down this road so many times now. It’s just take it on the chin and move on.”

Councillor Sarah Stamp, cabinet member for arts and culture at St Edmundsbury Borough Council, said: “While we put forward a strong case to the Competition Commission for not selling the Picturehouse we are confident that a buyer will be found for this well-loved, unique and viable cinema enabling them to continue to provide exciting and interesting cinematic experiences for people in and around Bury St Edmunds.

“Everyone who loves this cinema, as I do, needs to continue showing their support so we can prove to potential buyers what a good deal they could have on their hands.”

Councillor Robert Everitt, cabinet member for Bury St Edmunds on the borough council, added: “I think it’s certainly been proven there’s a customer base for it, but disappointing we have been put in this position because of a Government quango.”

Alan Jary, chairman of the Bury Society, said he was also “optimistic” potential buyers would come forward.

“We could of course get something even better,” he added.

A Cineworld spokeswoman: “Our main concern now is to sell this cinema as a going concern and to support our Bury St Edmunds cinema team through this difficult time.

“We remain committed to our partnership with Picturehouse and will continue to invest in and grow both Picturehouse and Cineworld estates.”