A new £365m venue is set to become the biggest indoor arena in the UK as it opens in Manchester.

Co-op Live, a giant black box next to Manchester City’s football ground, has a capacity of 23,500 and aims to attract more major events from London.

The venue was forced to apologise on Saturday after cancelling some tickets for a test event featuring Rick Astley so it could reduce capacity.

Comedian Peter Kay will officially open the arena on Tuesday.

Olivia Rodrigo, Take That, Eric Clapton and Liam Gallagher are among the other stars lined up to perform there.

On Saturday, 11,000 people were set to watch the Never Gonna Give You Up singer perform before the late decision to cancel some of those tickets.

Harry Styles has invested in the development and advised on elements of the arena’s design.

While the singer backed the arena, he’s a minor partner in terms of money and muscle.

Co-op Live has been built by City Football Group, owned by billionaire UAE royal and deputy prime minister Sheikh Mansour; along with Oakview Music Group, co-founded by US music mogul Irving Azoff.

Azoff’s son and business partner Jeff manages Styles and U2 among others, while Irving has managed the Eagles for 50 years.

So it’s no coincidence that the veteran Californian band won’t visit London or anywhere else in the UK on their farewell tour, parking only in Manchester for five nights at Co-op Live this June.

With other backers including promoters SJM and Gaiety, it has ambitious plans to lure more major award shows, gigs and sporting events from the capital and elsewhere in the north of England.

“There’s no reason why the Brits can’t come up north,” says Co-op Live executive director and general manager Gary Roden, who also wants it to be the “centre of combat sports in the UK”.

Backstage, he points out the modern suites and a gym for performers. Inside the auditorium, there are no advertising hoardings to distract artists when they’re on stage. That was Styles’ suggestion, Roden says.

“It’s all very much focused around the artists having the best experience, and that costs us money not to have advertising in here. But that’s a decision that we’ve made in order to maximise the connection between artist and fan.”

Fans sitting at the back will be closer to the stage than at similar arenas, he says. That’s because Co-op Live’s floor, which can hold 9,200 standing fans, is apparently shorter but wider than other existing arenas.

“It doesn’t feel that big when you’re up there,” says Roden, pointing to the top seats. “But when you’re down here, you feel like you’re at a massive event, which is what we want. It almost feels like a stadium standing gig down here.”

Otherwise, the layout is flexible but familiar. They haven’t tried to reinvent the basic arena design.

Roden also points to its acoustic and environmental credentials, and to the different food and drink options on multiple levels – instead of just one “soulless” corridor with basic offerings.

He thinks Manchester can sustain two major indoor venues, and says the ambition is “not to compete with” the city’s existing AO Arena.

“If we focus on bringing more to Manchester, then we’ll be fine,” he says. “That is about Manchester having a facility that can bring somebody in like the Eagles that will just come to Manchester rather than going to London.”

In truth, though, Co-op Live is competing with its existing Manchester rival, and it’s not clear whether the town is big enough for both of them.

“It’s going to be difficult for an artist to say, ‘Yeah, I’ve booked the arena that is 30 years old versus the arena that’s brand new’,” Roden continues. “That’s the reality of the situation.”

The other arena, which has been open under various names since 1995, has responded by carrying out a £50m renovation and expanding its own capacity from 21,000 to 23,000. It tried to block Co-op Live’s application for a late-night licence, and is running an advertising campaign to tell fans about its upgrade and city centre location.

A spokesperson for the AO Arena said it welcomed the competition, which “raises everyone’s game and is great for fans and artists alike”.

They highlighted its track record, saying stars would want to follow “in the footsteps of thousands of music, comedy and sporting legends”.

“Being a great venue isn’t something you can promise to be, you have to deliver and we have been delivering goosebump experiences for generations of fans for decades,” they said.

After the renovation, the AO will remain “the biggest arena in the UK for many types of show configurations”, while fans and artists have new facilities and improved acoustics, they added.

Co-op Live’s launch comes six months after the opening of another major venue in Manchester, the £240m Aviva Studios.

Meanwhile, struggling small music venues have been looking at the boom in big halls with envy.

Grassroots venues have made loud appeals for arenas to throw them a lifeline, with the Music Venue Trust (MVT) calling for £1 from every arena ticket to go to the pubs and clubs where many future headline acts cut their teeth.

MVT chief executive Mark Davyd told BBC Radio 5 Live this week that “all of our biggest stars in the UK came through the grassroots music venues”. Major operators then make “a lot of money” from those acts, and it’s “not frankly believable” that they can’t afford to contribute “a tiny amount” like £1 a ticket, he said.

Roden says he is “very aware it’s a hot topic” and the Co-op Live is “embracing the conversation”. But giving away £1 for every arena ticket sold is “too simplistic”, he argues.

The government should offer more help to grassroots venues, he suggests, and says talent pipeline problems involve more than just those small venues. And many new acts now make their names on social media or TV, he says.

Also, while acknowledging the financial pressures facing small venues, he adds that some are poorly run and there’s no robust system to decide who would get the subsidy.

The new arena will give £1m a year to the Co-op Foundation charity, which helps a range of causes, and will work with smaller venues on things like training, Roden says.

“If the conversation stops being ‘Give me a quid’ and quite aggressive – if it changed to be, ‘What can we do together to help?’, that’s where I think we start to get into that apprenticeship conversation and all those different things that we want to work through.

“We’ve got a list of ideas that we’re currently forming, and I think once we’ve been open six months or a year we’ll be really able to add something very significant to the grassroots system in Manchester.”