Heritage bosses have rejected the first cash bid needed to start uncovering the ruins of Sheffield Castle so it can become a visitor attraction.
The project is a key part of regenerating the Castlegate area after the former Castle Market, which sits on the castle ruins, closed last year.
But an initial bid asking for £362,000 to begin the project, with archaeological investigations, public engagement and design work, was turned down by the Heritage Lottery Fund’s national board in London.
It 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.
The board also raised concerns about the ‘risk’ associated with archaeological remains.
Coun Leigh Bramall, Sheffield Council’s cabinet member for development, said urgent talks would be held, and stressed the council would continue with the scheme.
He added: “We are deeply disappointed. It’s really important we find out exactly why they turned the bid down because it’s hard to believe there can be better projects than one that rediscovers the origins of one of Britain’s ancient castles and helps bring regeneration.”
Plans for the castle include creating a drawbridge over a re-excavated moat.
Professor John Moreland, chairman of the Castlegate committee at The University of Sheffield, added: “We remain committed to a project which will dramatically increase our understanding of Sheffield’s past, give people opportunities to rediscover their heritage, and be part of the council’s plans for the redevelopment of Castlegate.”
The Friends of Sheffield Castle said they would continue working with the council to finish the project.