The Barge Inn at Honeystreet that was saved from possible closure by a community buyout with the help of more than £400,000 lottery funding has closed and staff were devastated to be told last night that they are redundant.

Sources told the Gazette this morning there were rumours the pub owed as much as £100,00 in unpaid VAT to Revenue and Customs because it had not registered for VAT since villagers took over running the pub.

No reason has been given for the closure and John Brewin, chairman of the community buy-out committee, said this morning: “I cannot say anything until later on today; I can’t make any comment until late afternoon because there are procedures to be followed.”

Mr Brewin would neither confirm or deny that the popular 200-year-old canal-side pub at Honeystreet had closed but the Gazette was told by friends of staff working there that they were told last night that the pub was closing.

One caller who asked not to be identified said: “I have a friend who has been working there since the pub re-opened and all the staff were told last night that the pub was closing and that they have lost their jobs. They told me that everyone there was gutted because the news came completely out of the blue.

“They have not been able to find out exactly why it’s closing but apparently it’s something to do with the property owner and the lease.”

The Barge Inn Community Project took over the pub in August 2010 after its previous landlords, June and Adrian Potts, retired after running the pub for 17 years.

It closed for six weeks from February last year and re-opened in April after a major refit financed by the Big Lottery’s Village SOS fund with more than £430,000 being poured into refurbishing the building and with plans to eventually have a village shop – the last one closed 20 years ago – as part of the project. The shop has never materialised.

With the BBC filming every aspect of the refurbishment for a documentary it became high profile with people like Aggie MacKenzie, co-presenter of How Clean is Your House, being brought in to help with the spring clean before work could start including a brand new oak bar. The village buy-out of the pub’s lease featured in a one hour BBC documentary coinciding with the completion of the refurbishment.

Sandra Bhatia, who was appointed by Village SOS to head the project, told the Gazette this morning she was unaware the pub had closed altogether and she said: “I am in shock. I was told on Friday there were problems there but I was unaware it was going to close."

Ms Bhatia said she would be contacting the National Lottery to let it know that the pub was closed so they could investigate what was going on.

The property owner Ian McIvor, whose business Honeystreet Ales leases the pub to the community committee, said he was surprised to hear the pub had closed and he said: “I have no issues with the pub or management committee and this is the first I have heard that it has closed.”

Mr McIvor said the rent was paid up to date.

When the Gazette called at the pub at 11.30am today it was closed with no sign of it opening and there was a sign on the door saying: “We regret that the Barge Inn will be closed on Monday 22nd October.”