The Royal Hall was closed last year

Harrogate Council had been relying on money from Yorkshire Forward to help to preserve the town's Royal Hall.

The 100-year-old Grade II listed building was closed to the public last autumn after part of the ceiling in the south corridor collapsed.

Lottery funding of �6m has been secured but without the �2.5m from the regional development agency, the shortfall has risen to �5.5m.

It is planned to transform the building into a multi-purpose community and entertainment centre at a cost of �14.5m.

'Asset replacement'

Council leader Mick Garner said: "It is looking extremely unlikely that we will be able to replace the Yorkshire Forward money.

"But we have to try so we will have to go back to the Heritage Lottery fund cap-in-hand to say we need more money out of you.

"The building is a national treasure and the money is going to have to come from the nation."

Yorkshire Forward has said there was never any guarantee money would be awarded to the scheme.

A spokeswoman added the project did not deliver the necessary targets to create jobs and increase the number of new businesses expected for an investment of �2.5m.