The closure is a cruel blow to the city's live music scene, with the institution supporting more than 30 Ballarat bands.

Many were yesterday reeling from the news, not knowing how they will cope without the venue.

Ballarat bands in particular have relied on gigs at the Peel St icon to establish a fan base and pay the bills.

Bridge Mall Inn owner/operator Mark Eatock told The Courier yesterday that a 460 per cent increase in insurance costs had forced the decision.

"Our premium went from $2500 to $11,500 and we have never made a claim," Mr Eatock said.

"The price of beer went up again and we chose not to pass that onto our customers."

Mr Eatock said he made the decision to close on Monday. The owner of the building, believed to be a large company outside of Ballarat, is yet to be told of the closure.

"I just can't survive in the world like this. If you don't have public liability insurance, you can't trade," he said.

Mr Eatock has been at the helm of the Bridge Mall Inn for 31/2 years. Despite being a staunch supporter of live music, he has ruled out any further ventures in the live music industry.

"It's cheap to run, but it doesn't turn over the big dollars like nightclubs," he said.

"I won't be doing this again - you can't make the money to even cover your costs."

Two people will lose their jobs as a result of the closure.

As Ballarat's home of live music, the pub gave local bands the chance to get on stage five nights a week, and has brought big names in music to the city.

It has left little option for bands trying to get a foothold in the industry but to travel to Melbourne to seek gigs.

The last three bands played at the pub, which is affectionately called "The Rat" on Saturday night, but there was no indication then that the business was to close.

Maryborough's Storm Front lead singer Keith McNamara said there was no sign it was to be his last gig at the pub.

"I loved playing there because it was a good venue. It is the only bar in central Victoria worth playing at if you are a live band," Mr McNamara said.

"The only hope is that someone else will pick up where the Bridge Mall Inn has left off."

Ballarat band Glover bass player Travis Keast said: "It is unbelievable to lose an original live music venue like that. There is nowhere else where a live band can play regularly in the city."

The closure also spoiled a first gig by up-and-coming Castlemaine band GBA, which was booked to play tonight.

But the city's bands appear undaunted by the closure, with other late night venues across the city being door-knocked this week in the hope of a gig.