AMBITIOUS proposals to build a £19m National Army Museum in the region have suffered a huge setback.

The Northern Echo exclusively revealed earlier this year that Army chiefs had earmarked Marne Barracks, at Catterick Garrison, North Yorkshire, as the ideal location to display historic military vehicles.

The state-of-the-art facility, which would provide more than 150 new jobs, was hyped as a premier learning environment for the study of local and national military history, from the Victorian era to the present day.

But Army chiefs have been forced to go back to the financial drawing board after the Heritage Lottery Fund rejected an application for a £4.5m grant - in favour of pledging £26m to transform the ancient landscape of Stonehenge.

National Army Museum assistant director, David Smurthwaite, said: "It is difficult for us to understand.

"There were various things they were worried about, including our business plan and what they described as the lack of strategic vision of the Ministry of Defence towards its museums."

The project was unveiled to the people of North Yorkshire earlier this year, with blueprints for the building showing a swooping roof line, with space inside to display tanks, trucks and other military hardware in artificial environments reflecting the situations the vehicles were designed for.

A caf and an auditorium were also included in the proposals and organisers said the museum complex could end up supporting the incomes of up to 800 people in one way or another.

But despite the setback, Mr Smurthwaite insisted that planning for the National Army Museum North would continue, with the possibility of a bid for European funding.

"We will have to start fund-raising and seek sponsorship," he said. "We are so convinced that North Yorkshire is the best place to have the museum that we will move heaven and earth to bring it there."

A spokeswoman for the Heritage Lottery Fund said it could not comment on reasons for rejecting applications.

But she said the Army proposals had been competing against a scheme to enhance the World Heritage Site of Stonehenge, by improving access and creating a visitor centre.