A government grant has fuelled hopes that a popular Dales youth hostel could be saved from closure.

The Youth Hostel Association announced in March it would be selling off ten of its premises to help cover the cost of the foot-and-mouth crisis.

The closure of the countryside was reported to have cost the organisation as much as £5m, putting its rolling restoration programme in jeopardy.

Aysgarth in Wensleydale was among the locations earmarked for the axe - until a concerted local campaign prompted the association confirm a stay of execution in April.

Since then, managers have been negotiating with North Yorkshire County Council, the Yorkshire Dales National Park Authority and Richmondshire District Council in the hope of finding a way around the problem.

On Monday evening, the county authority's Richmondshire area committee was told a Government grant of £500,000 has helped ease the YHA's predicament.

However, association executives have emphasised Aysgarth is just one of many sites which need investment and a single financial boost may not necessarily be enough to guarantee its future.

''Nevertheless, we have been making real progress,'' said Councillor John Blackie, who represents Upper Wensleydale at County Hall as well as on the national park authority.

''A feasibility study researching a possible future for Aysgarth Youth Hostel has begun and we are continuing our hunt for more money, including the possibility of grants from Europe or the British Government's Single Regeneration Bid programme.

''We remain quietly confident Aysgarth can be saved and become a facility for the 21st century.''

A statement issued by the YHA on Monday was a little more cautious.

''The decision to close Aysgarth was not taken lightly,'' said regional manager Simon Ainley.

It requires a substantial amount of investment to bring it up to the standard that our customers now expect.

''However, if we can establish a strong case from the outcome of this feasibility study for removing Aysgarth from the closure list and we can secure external funding to cover the cost of refurbishment, we will put that case to the trustees of the YHA.''