Cash on the line for nightclub as utilities wield their power: Marianne Macdonald on a horse trainer caught up in a rat-race to keep gas and electricity flowing into his new venture

RACING not being what it used to be, Barney Curley, 52, a racehorse owner and trainer, decided to have a flutter in the entertainment business. He bought a nightclub in Windsor, from the receivers.

Mr Curley hired Charles Corkery to manage the 1,000- capacity night spot, called Mirage, and they spent their first day there in mid-November. Among their first callers were representatives of Southern Electricity and British Gas.

Both utility companies wanted security deposits: SEB demanded pounds 2,500 to continue its power supply; British Gas asked for pounds 5,000 and gave Mr Curley two days to come up with it.

'These guys landed like the henchmen of Al Capone,' Mr Curley said. He said he was told that unless he paid pounds 2,500 cash - on the spot - his electricity would be cut off. He suggested pounds 2,000 cash and a cheque for the balance. This was rejected.

Mr Curley said he had to borrow pounds 350 from a friend, and this, plus his pounds 2,000 and a cheque for pounds 150, was reluctantly accepted over the telephone by the SEB's accountants. Two days later, British Gas wanted its pounds 5,000. It said the safeguard was necessary because Mr Curley's company was a new one and because the nightclub had gone into receivership three times with unpaid debts.

Concerned about his cash flow, Mr Curley called on Ofgas, the industry watchdog, which in turn called British Gas. After a visit to the club by a British Gas representative and a pledge by Mr Curley to pay his bill monthly, the utility agreed to waive the deposit.

Meanwhile, problems were mounting with the SEB. Mr Curley was being charged for electricity not only for Mirage, but also for a public house, the Falcon, in the same building.

His manager, Mr Corkery, rang and asked that the Falcon be disconnected from the Mirage because it was not owned by their company. The SEB said it would look into it. Then two electricity bills arrived, one for pounds 3,489 for Mirage, one for pounds 992 for the Falcon. The SEB's response was that when Mr Curley took over the electricity supply to the building, it included the redundant pub.

The racehorse owner, fed up with the dispute, offered to pay both bills pending clarification - but minus the pounds 2,500 deposit he had already put up.

'If I hadn't been taken off guard, I wouldn't have paid it in the first place,' he said. 'How can a new business afford such large deposits in a recession?'

His offer was not accepted. Two weeks ago, two electricity company representatives arrived to cut off the power. Mr Curley refused to allow them in, and the following day picketed the SEB's head office at Egham, Surrey. Last week, he reluctantly paid in full.

The SEB contends that Mr Curley's objection to a new businesses having to pay a deposit is unreasonable.

'Our practice is, we require new customers to establish a good payment record,' a spokesman said. 'We think it not unfair to do that over a 12- month period.

'We made it clear the deposit would be paid back in 12 months, with interest, if account payments were satisfactory.'

Mr Curley's concern is not unusual, according to the electricity watchdog, Offer. It had 700 complaints about deposits last year. It added that at the end of September, 41,000 business customers had put up pounds 12m in deposits.

Both watchdog offices have called on the utilities to look at cases individually before demanding such deposits. They have suggested that the companies could check credit references and explore the option of monthly payments as alternatives to the deposits policy.

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