The company running the interactive gallery space at the Public in West Bromwich has gone into administration it was announced last month. The Public Gallery Ltd never opened the art space because of technical problems. Sandwell Metropolitan Council, which is responsible for the Public, will now take on the interactive gallery.

Arts Council England (ACE) has withdrawn its £500,000 annual grant towards the venue's running costs but has committed £3m as a one-off payment to Sandwell council to create a business plan to include the interactive gallery. A spokeswoman for the Public said there was no time scale set for the new business plan to be produced.

The artists whose work is in the interactive gallery and the surrounding exhibition have been voicing their frustration with the situation. Lithuanian artist Esther Shalev-Gerz was to unveil an installation, entitled Les Portraits des Histoires, in a temporary exhibition space at the institution, but it has yet to open for public viewing.

"I am very concerned," she said. "The only time the piece was on display was for the private view on 24 June. The Public has told me that it is waiting to finish other 'technically challenging' works, but you only need to push a button to activate my piece, which consists of four videos and a wall of 48 photographs.

"I have signed a contract with the Public and am waiting for a response from the Arts Council [which helped fund the work] and director of The Public [David Clarke] before deciding on further action."

Shalev-Gerz has written to the Public and the Arts Council to enquire about the fate of the piece and the accompanying catalogue. A spokeswoman for the Public said the director was planning to talk to Shalev-Gerz in an effort to relaunch the exhibition.

Julianne Pierce, executive producer of exhibitor Blast Theory, said: "We have worked closely with the team at The Public to install our work, Flypad. The interactive gallery is a complex and ambitious project, and as commissioned artists, we have delivered our installation on time and to budget.

"The building's technical infrastructure has contributed to the delays. The artists have installed their work, and are now ready to go."