The Royal Hall was opened in 1903

It has been offered �6m by the Heritage Lottery Fund to help restore the theatre which is currently closed.

But councillors say the work would cost around �14m and they do not have enough money in the budget to bridge the gap.

The Lottery Fund is to be asked to keep the offer open while investigations take place into the possibility of a partial restoration.

Members of the Royal Hall Restoration Trust, which is campaigning for the theatre to be brought back into use, have offered �100,000 for a report to be drawn up on what could be done with the available money.

A jazz band has been used to lobby councillors to restore the hall

They fear that the offer of the lottery money may be withdrawn, leaving little hope of the building ever reopening.

English Heritage also believes that restoration would be possible using the �6m from the Lottery Fund plus about �2m from the council.

Mike Gardner, the leader of Harrogate Borough Council, said the authority could not afford to contribute any more cash.

"We're only a small district council and we don't have a big budget," he said.

"If we are not careful we are going to go into financial meltdown."

The Royal Hall in the town centre was opened in 1903 and is a Grade II building.

It was used for a wide range of entertainment events until it was closed in November 2002 after the building was found to be unsafe

Even if the council decides not to proceed with restoration work, it still has a legal duty to keep the listed building weatherproof.