ARTS fans planning a £750,000 cultural hub are going back to the drawing board, after missing out on their first choice building.

A group led by Durham resident David Mitchell filed a bid to buy a three-storey building on Old Elvet, in Durham city centre, to its owners Durham University in early August.

Supporters had hoped to create an arts facility including a gallery, cafe, workshops, offices and an apartment.

However, the university has turned down their offer. It is believed a rival bid from a local property developer has been accepted.

Mr Mitchell said he was disappointed but not disheartened by the decision.

"I’m disappointed because the university says it’s trying to aid the city’s development and diversification - its commercial and retail base," he said.

A Durham University spokesman said it was unable to comment on the issue.

Mr Mitchell and others are now investigating other potential venues, including three other Old Elvet properties - two owned by Durham University and one belonging to Durham County Council.

He said: "We can’t sit on the money. We need to find an alternative appropriate place, which has to be sustainable.

"We’ll try to identify something that might be coming up in the next six months. We remain committed to the project."

A few months into the planning, Mr Mitchell said he had been pledged substantial sums of money by private individuals. Supporters had hoped the arts centre could have opened as early as next May.

Following the university’s decision, more than 30 people had been in touch to encourage him to continue with the scheme, Mr Mitchell said.

"Given the level of unsolicited interest shown by professional and amateur artists in our project, we believe this centre will help raise the city’s profile as a place worth more than a cursory stop by travellers and tourists," he added.

Durham-based architect Tony Hyland and others began trying to open an Ikon Gallery in the city in 2009 but failed to find a suitable venue.

Glass artist Janet Rogers recently opened her Crushed Chilli gallery, which includes a gallery and studio, on South Street.