Alternative funding is being sought to bring a dream of uncovering the ruins of Sheffield Castle and creating a visitor attraction to life.
The project is a key strand in regenerating the Castlegate area of the city after Castle Market closed in 2013 and plans for the castle included creating a drawbridge over a re-excavated moat.
Almost a year ago, it emerged that a funding bid to the Heritage Lottery Fund, seeking £362,000 to begin the project, had been rejected by the organisation’s national board.
Heritage chiefs said they recognised the heritage importance of the site but questioned what could be achieved for the estimated £5 million cost of the full project and raised concerns about the ‘risk’ associated with archaeological remains.
Sheffield Council staff are now in the process of drawing up proposals to seek alternative funding for the scheme.
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Coun Leigh Bramall, cabinet member for business, skills and development, said: “Castlegate is important because its a key part of the city centre that needs regenerating but it has got huge potential.
“It has got rivers running through it , most of the hotels in the city are in that area and its the first place you reach off The Parkway so it is a gateway in every respect and it is important to regenerate that area.”
Other regeneration projects in the Castlegate area include the Grey to Green scheme to revamp West Bar, which is currently underway, and the rejuvenation of Sheffield’s former main post office on Fitzalan Square.
There is also a campaign for the city’s HS2 high-speed rail link station to be situated there instead of at Meadowhall when the scheme comes to fruition.
A final decision on the station location has not yet been made, but council leaders say that having it in the city centre would create 7,000 more jobs than at Meadowhall and £2.5 billion extra economic benefits.
Coun Bramall added: “There is a lot starting to happen in Castlegate and if we got the HS2 station there it would be transformational for the city and the city region.”
The Castlegate area is also understood to be prime for regeneration because it has several suitable sites on West Bar and by Victoria Quays that could be used for further projects or development in the future.
Demolition of the Castle Market - which has been replaced by the £18 million Moor Market - began earlier this year and is due to be completed by November. Accessible parts of the castle ruins are being monitored.