A BID to bring historic Hylton Castle back into use has been turned down for funding.
Plans are afoot to transform what remains of the 14th-century fortress into everything from a visitor centre to youth disco venue.
But the proposals have met a major stumbling block after the Heritage Lottery Fund (HLF) decided not to fund the project in the latest round of handouts.
Sunderland City Council submitted the bid on behalf of a multi-party group which included campaign group Friends of Hylton Dene, incorporating Castle in the Community, and English Heritage.
The team remains hopeful that the project can still go ahead in the future.
John Kelly, the senior councillor responsible for culture in Sunderland, said: “Unfortunately the bidding process for funding from the Heritage Lottery Fund was oversubscribed on this occasion.
“While we are naturally disappointed with the HLF’s decision not to fund the application for Hylton Castle, the plans to restore this important landmark are still very much in place.
“We will be meeting with the HLF in due time to better understand why our application was turned down, and to look at ways we can make an improved bid for funding in the future.”
Coun Kelly said the council worked in partnership with the HLF, and the fund had supported a number of important projects in the city.
“We look forward to continuing this excellent working relationship,” he said.
Keith Younghusband, chairman of the Friends of Hylton Dene and the all-party group, said he was waiting to hear full details of why the application was turned down.
“I’m very disappointed that the bid was not successful because the castle is still at risk and we don’t seem to be any further forward despite our hard work,” he said.
“I’m very hopeful something will come from the meeting between the council and the Heritage Lottery Fund.”
The funding bid was submitted in April this year, marking the end of years of work by community heritage campaigners.
Friends of Hylton Castle persuaded English Heritage, which is responsible for the castle, and Sunderland City Council, which owns Hylton Dene, to get on board and work towards bringing the castle into use.