The Thinktank museum of science and discovery at Millennium Point is to get a new £500,000 loan from Birmingham City Council.

The decision means that the total amount lent by the council to Thinktank will stand at £1.2 million.

In addition, the council last year granted a £16.3 million loan to Millennium Point.

The latest handout for Thinktank involves the amalgamation of an existing £705,000 loan and the incorporation of a £500,000 over-draft facility at the HSBC bank.

Thinktank directors say they will clear the loan by January 2013, allowing the museum to move out of debt.

A change in local authority accounting rules means the council will have for the first time to charge Thinktank, a registered charity, 4.5 per cent interest on the loan - equivalent to repayments of £54,000 a year.

A report by council interim chief executive Stephen Hughes recommending the new financial arrangements points out that Thinktank will save money by getting rid of the HSBC overdraft.

The £16.3 million loan to Millennium Point is repayable at 5.8 per cent interest, the minimum that can be charged to a business by a local authority under European Union rules.

Sir Bernard Zissman, the new chairman of Millennium Point, vowed to overcome financial difficulties.

Opened in 2001, Millennium Point was the biggest Millennium project outside of London benefiting from a £50 million Government grant. Visitor figures were disappointing to begin with and plans to develop a concourse filled with cafes, restaurants and leisure facilities had to be postponed because not enough people were passing through Millennium Point to make the project viable.

Sir Bernard said Millennium Point had made "significant strides" to improve its financial position.

"We have finished a ten-year strategic plan and put the businesses finances on firmer foundations.

"We are also in a key position in relation to the city's ambition in the development of the multi-billion pound Eastside and City Park.

"Since it opened some 4.5 million people have visited Millennium Point and pretty well all of the lettable space is now taken," he added.