Fears have been raised that the renovation of an historic building in Diss could be 'mothballed' as a result of the drying up of funding streams.

Fears have been raised that the renovation of an historic building in Diss could be 'mothballed' as a result of the drying up of funding streams.

Town councillors have blamed the credit crunch and the creaming off of lottery monies to the London 2012 Olympics for the lack of grant support for the Corn Hall revamp.

Diss Town Council unveiled a �1.8m project to turn the listed community facility, in St Nicholas Street, into a theatre, concert hall, cinema, and conference hall two years ago.

But Glyn Walden, spokesman for the Corn Hall working group, told councillors last week that they were beginning to run out of funding avenues after the Heritage Lottery Fund rejected a bid for grant aid.

The town council, which holds its meeting at the prominent building, has also received a negative response from South Norfolk Council over the use of section 106 monies from developer contributions to fund the Corn Hall project co-ordinator's post, which is set to expire in two months.

Mr Walden said it was time to think about phasing the project to ensure that the 19th century building first met Disability Discrimination Act requirements before seeking funding for a full refurbishment.

'We are reaching a stage where we either mothball the Corn Hall or close it until the recession is over. We can not advertise it at the moment because soon it will be illegal and if it is not brought up to scratch, it could be closed,'

'If Diss Town Council does not get something to help push this project forward, the possibility of mothballing is a real possibility,' he said.

Mr Walden said that project co-ordinator Sue Reeves was set to reapply for Heritage Lottery funds and the town council was still waiting to hear whether South Norfolk Council will contribute to the scheme. It comes after the project received a blow last year after serious cracks in the brickwork of the Corn Hall were discovered by Norfolk County Council surveyors, which is set to raise the costs of the revamp.