Restaurant saved at the eleventh hour

But by Sunday owner James Kimber changed his mind and "at the eleventh hour" made the decision to keep going.

By then, however, letters had been sent out and calls made to customers who booked the venue for upcoming events including wedding receptions and parties.

Some reacted with shock and dismay.

James Kimber commented: "It is not closing. We did consider closing it, and we had talks about it with staff and people here on Friday.

"But we had so many people saying they would be heartbroken if it closed that we decided at the eleventh hour to keep it open.

"I didn't appreciate how much people liked it."

He claimed that everybody who had booked the Mermaid had been offered the opportunity to hold their event at the Cooden Beach Hotel, which he also owns.

He also said that most of the staff working at the Mermaid were previously employed at the Cooden Beach Hotel and would simply resume working there.

One reader had already called the Observer to give his reaction to his daughter's wedding reception being cancelled. The event was booked back in April 2009 and was due to happen in May this year.

He commented: "She's up in arms '“ they have the church booked, and sent out the invitations last year.

"It would be a real job to find anywhere else now. It's the fact they have given us no warning whatsoever. The reason was they are in financial trouble '“ that's what my daughter was told."

Another e-mailed asking for help to find another venue before an offer was made to help with the cost of changing the date so that a reception could be held at the Cooden Beach Hotel.

Donna Page said her younger brother was getting married in May having booked the Mermaid for the reception.

She said: "The invites have gone out, hotels and transport booked by guests, and now they have been told that The Mermaid is out of business and closed.

"They have paid a 300 deposit and scrimped and saved for this day."

Later she said the Cooden Beach Hotel had been "brilliant" in working out ways to help the couple and come up with a satisfactory solution.

Mr Kimber, who spent 60,000 on refurbishment including a new terrace at the front of the restaurant, said he had considered redevelopment and turning this part of the building into apartments.

He has owned The Sackville since July 2007 and admits The Mermaid had "a chequered history".

He is now looking to the future and thinking of re-launching the business with a different name.

"People have been broken-hearted. They have been offering help. I had just thought I would take the staff back to the Cooden Beach Hotel and get the architects in.

"I only told people on Friday...then on Sunday at the eleventh hour we decided not to, but in that time a lot of people were upset."

Would you be shocked if the Mermaid closed down? Leave your comments below.