Harrogate Theatre's bid for a £2m cash boost from the National Lottery has been snubbed, throwing a £3m restoration plan into doubt.

Almost five years ago, the theatre faced closure with falling audience numbers. But now it is on a firm financial footing.

Management and staff are said to be devastated that their plea to the Arts Council for the cash has been rejected.

The Oxford Street theatre was to have been modernised in a £3m scheme.

The 100-year-old building was all set for a revamp, with £2m of Lottery cash starting the project.

Plans had also been laid to raise more than £1m locally.

Theatre chairman Jerry Mass, who has been helping to spearhead revival of the theatre, said: "We are so very disappointed. This is certainly a severe setback.

"It is just too early to say what will happen. But for the past five years we have all worked to transform the theatre's fortunes.

"We needed the money to fund urgent repairs, modernise the building as well as provide vital disabled facilities."

The Arts Council told theatre management the council had not met specific criteria.

Theatre chiefs are planning to take up their rejection with the Yorkshire Arts Board and the Arts Council.

Harrogate mayor Councillor Bob Nash, who is a member of the theatre board, said: "There is absolute determination that we won't let the theatre close."