Denbighshire council has issued a statement to try to quash "rumours" that the Scala Cinema and Arts Centre is to close.
A demonstration is due to take place at the centre, in Prestatyn, amid fears of its closure.
Council leader Hugh Evans said he was "extremely concerned" about the false rumours and said the Scala was an important facility for the county.
Campaigner Sandra Pitt said the demonstration would still go ahead.
The original Scala first opened in 1913, but the cinema closed in 2000.
In February 2009, it re-opened as an arts centre and said it was Wales' first all-digital cinema.
'A lot of time and effort'
However, it has failed to generate the visitor numbers it hoped for, with 6,000 fewer than its 50,000 target in the past year.
In May Denbighshire council approved an £86,000 bail-out plan to rescue the centre, which at the time had an £84,000 deficit and is expected to lose more this financial year.
In a statement on Tuesday, council leader Mr Evans said: "We are extremely concerned that these rumours are circulating as they are not true.
"The council is one of the Scala's key funding partners and the authority is investing a lot of time and effort in helping the Scala to develop as a key centre for the culture, arts and community in the Prestatyn area.
"The council sees the Scala as a very important facility for both the people of Prestatyn and the county as a whole.
"We will continue to provide advice and assistance to the Scala, working with the board to move the business forward."
Campaigner Sandra Pitt said the demonstration - to coincide with a board meeting at the Scala - would still go ahead to show the strength of feeling in the town.