Croydon Council’s controversial decision to make its chief executive a director of Fairfield Halls has created “clear potential for a conflict of interest”, Labour opposition leader Tony Newman has said.

Last week’s unprecedented appointment means Jon Rouse now holds a key position in deciding the future of the 47-year-old entertainment venue, which has been under threat from council plans to build a multi-use ‘arena’ in the town centre.

Such a development would create a direct financial competitor for Fairfield Halls, which already struggles to raise enough money to keep going after the council cut its £1m-a-year grant in 2005.

Mr Rouse was a staunch campaigner for the failed plan to build a new arena on the Croydon Gateway site, telling a public inquiry Croydon’s lack of such a venue “seriously undermined the town in developing and executing its overall economic strategy”.

But his new role means he will have to juggle his support for any new arena with safeguarding the future of Fairfield Halls.

He said: “I am very pleased that the council has the confidence to appoint me as one of its representatives on the Fairfield board.

“Long before I came to Croydon I was aware of how highly the venue is regarded. It’s a much loved institution, not just in our town but throughout the south east.

“My ambition is to help the board and the council take Fairfield forward as a fitting centre for a wide range of entertainment for another 50 years or more.”

The appointment is the first time the council has placed an unelected representative on the Fairfield Halls board - a situation Coun Newman described as “extraordinary”.

He said: “The decision to place the chief executive in a position where there is such a clear potential conflict of interest amounts to a public admission of failure by the current Conservative council, that after nearly four years of supposedly running the council their arts policy is in total disarray.

“It seems to have bypassed the usual democratic process, and I think (Council Leader) Coun Fisher has got questions to answer about why he’s done it, and why he’s failed to act to make sure there are accountable and electable people on there.”

Mr Rouse, who has been chief executive at the council since 2007, joins Conservative councillors Dudley Mead and Helen Pollard, and Labour councillor George Ayres as council appointments on the 15-strong board.

Coun Mead, the board chairman, said: “Nominating Jon Rouse to join the Fairfield board makes sound sense.

“Everyone knows that Fairfield needs a big overhaul, even though we’re still some way from deciding exactly what should be done, how it will be carried out and how it will be funded.”