Thousands of youngsters from Merthyr have used the Oasis project

The Oasis project helps youngsters with drug and alcohol abuse, homelessness and teenage pregnancy.

European Objective One funding has run out, and the project will close in July.

Oasis suffered financial problems two years ago but Merthyr Council stepped in.

The decision was made at an emergency meeting of management at the Oasis centre on Thursday.

This project fills a void in providing support for young people Ian Benbow

The centre which opened in 1995 also acts as a drop-in centre for single mothers to meet and has also set up arts projects in Merthyr.

Ian Benbow, former manager and now secretary of Oasis, said it was difficult for the volunteer-run project to survive without additional money from grants or donations.

'Sad day'

He told BBC Wales: "It's a sad day for me and a sad day for people in Merthyr and our user groups.

"It comes down to funding. Voluntary organisations rely on donations and grants.

"Drugs and alcohol is only a small part of it, the centre helps young people who are homeless, on benefits or who are struggling with the system in general."

The work of the project would have to be carried on by other agencies when it closes its doors in July, he said.

"This project fills a void in providing support for young people.

"With it going, responsibility falls back on the authorities.