Oldest music hall faces demoliton after losing £4m Lottery Fund bid

The future of the world's oldest surviving music hall, Wilton's in London, is in doubt after the Heritage Lottery Fund (HLF) refused an application for £3.8 million to save the crumbling building, a relic of the Victorian East End that has been at the heart of the community for more than 150 years.

The fund has named five UK heritage sites that will share £11m towards development and renovation. A historic mill in Shropshire known as the "grandfather of skyscrapers" and a proposed Concorde aircraft museum in Bristol, also missed out on vital funding.

"This is a real blow," said Wilton Music Hall's artistic director Frances Mayhew. "We understand that funds are limited at the Heritage Lottery, but Wilton's is literally falling down, and this was our last opportunity to get funding for repairs. They told us to try again next time, but we might not have a building left to save by the end of the year."

The theatre, which opened in 1858, is threatened with demolition if repairs to its dilapidated outer shell cannot be completed. Since 2004, half of the building has been open to the public, hosting community theatre. The latest setback comes after an earlier application for lottery funding was rejected in 2007. At the time, the trust representing the theatre was told the project was sound and to try again in the future. Four years on, it has been turned down again.

"It's frustrating, because we feel like we've wasted time and a lot of money trying to secure this funding, which was never going to come," said Ms Mayhew. "We wish they could have told us sooner so that we could have focused on raising the money ourselves."

Since the decision was announced last week, more than £170,000 has been raised for the hall through a last-ditch rescue attempt by supporters. Most donations have been made via text message, and supporters have taken to Twitter and Facebook to spread the word. One anonymous donor gave £20,000.

The actor David Suchet, one of the theatre's patrons, told The Independent: "It is unbelievable that a place of entertainment so historic and so fragile as Wilton's is refused funding again. I have seen what a terrible state it is in and have for some time been championing the cause. It really is the last chance for Wilton's, but if every Londoner donated £1 it would be saved forever."

The Heritage Lottery Fund was not available for comment yesterday. In a statement last week it said that while Wilton's was "a unique and precious part of our theatrical heritage", the current round of funding had been three times oversubscribed and the bids from other projects had been stronger.

Other projects which missed out on the latest round of funding included a plan to renovate and develop the area around Ditherington Flax Mill near Shrewsbury, and a proposal to house the last operational Concorde aircraft at a new museum near Bristol.

The HLF rejected suggestions that its funding was not fairly allocated to poorer areas. Tower Hamlets, home to Wilton's Music Hall, is one of London's poorest boroughs. "To date, HLF has made 215 awards in the London Borough of Tower Hamlets totalling £58.6m," it said.

The winners

* Middlesbrough's Transporter Bridge, North Yorkshire: £2.6m for new lifts and a new gondola with spectacular views.

* HMS Alliance, Gosport, Hampshire: £3.4m for essential repairs.

* Penarth Pier Pavillion, Vale of Glamorgan: £1.65m for restorations to the Victorian structure.

* Wakefield Cathedral, West Yorkshire:

£1.58m to fund archaeological work and lighting, heating and flooring improvements.

* Wentworth Castle Conservatory, Barnsley, South Yorkshire: £2.4m to restore the iron glasshouse conservatory and landscaping.