More than �1m work has already been done at the castle

Since work began at the landmark, the remains of a drawbridge and a network of medieval walls have been uncovered.

Over �1m was spent on improved access and structural repairs and it was hoped a visitor centre would complete it.

The Heritage Lottery Fund, which had funded most of the work, has rejected a bid for �900,000 but Carmarthenshire Council said the project would proceed.

The castle was founded in 1109 by Henry I and became the centre of Norman control in south west Wales.

Much of the building was destroyed by the Owain Glyndwr rising in the 15th Century but was subsequently strengthened in the 1600s.

The restoration project started in 2002 with the aim of making the castle more of a tourist attraction and regenerating the surrounding area.

The aim of the project was to make the castle more tourist friendly

Specialist stone masons were brought in to re-appoint the walls and repairs made to the shell keep and gatehouse.

Some buildings alongside the castle in Nott Square and Bridge Street were demolished while archaeologists surveyed the surrounding ground.

The Heritage Lottery Fund contributed �750,000 towards the project but has turned down a bid for a further �900,000.

Council building conservation officer John Llewelyn said it had been hoped to create an interpretation centre at nearby Castle House, renovate other buildings backing on to site and build a landscape concourse in front of the castle.

"Technical issues"

Mr Llewelyn said: "We are very disappointed not to have received lottery funding but are exploring other avenues to finance and are hopeful it will proceed."

The council said there two 'technical issues' that the lottery board raised but said the main reason it had not received the money was because so many projects were competing for a set amount of cash.

It said it was unable to set a completion date until alternative funding could be found.

But executive board member for regeneration Clive Scourfield said: "We remain enthusiastic about the project and are confident that funding will be secured to complete the work as planned.