The decision to refuse the application was made last week by the Arts Council lottery panel, which has an estimated pounds 300m to spend this year. It will be publicly announced tomorrow.
The actress Zoe Wanamaker, daughter of the late Sam Wanamaker, who conceived the project, said she was "devastated". She added: "It's a continuation of what's being going on for the last 25 years, that the project has been dogged by sniffiness and the view that it's something which is touristy and Disneyland and down-market."
The Globe had applied for the money to finish its thatched "Wooden O" - a recreation of the open-air Globe Theatre Shakespeare used in the 1600s - and to build a smaller, indoor theatre. But the Arts Council said it was not convinced the International Shakespeare Globe Centre would generate enough income to support the education centre, archive, library, cinema and exhibition it wants to build. The decision is being read as a comment on the project itself.
The rejection is doubly bitter, as it follows the Millennium Commission's judgement that a separate pounds 12.5m application for a Shakespeare exhibition should be referred to the Arts Council.
The decision means that the Globe centre is less likely to meet its completion date of September 1999 and may have to scale down its plans.
However, the centre, which has raised pounds 12m in donations, may receive lottery funding in future - even if the amount is less than it wants.
Lord Gowrie, the chairman of the Arts Council, said last night that the project was "an inspiring and important vision". But he added: "More work needs to be done to ensure the council's conditions of funding are met."Reuse content