The renovation of the Sherrier Centre, in Church Street, was originally aimed at creating a single venue for the town, district and county councils as well as providing space for community groups and a learning centre for disabled people.

However, Lutterworth Town Council has withdrawn its support for the project because members were unwilling to accept the terms of a lease offered to them.

Mayor Ken Seymour told the Mail the deal offered would not have represented good value to council tax payers in the town.

Despite this, Paul Love, Leicestershire County Council’s head of commercial and support services, said discussions were going on with other partners and the renovation work was still likely to go ahead.

He added: “We are talking to several other groups about taking on the space the town council would have occupied.

“We are talking to various youth services about taking on the space, so there should be no problem filling the new centre.”

Mr Love said it is not known at this stage what the cost of the renovation will be, but the project will be part- funded by the county council with contributions from the other organisations involved.

He added: “We are having more meetings in August and after those we will have a better idea of which organisations will be in the building.”

Lutterworth mayor Ken Seymour said the town council had reluctantly opted out of the new centre.

He said: “We were unable to reach an agreement on the lease which would have represented good value for council tax payers in Lutterworth.

“At present we are happy that the town council facilities remain at the Swiftway Centre.”

Lutterworth county councillor Rosita Page said she was disappointed the town council had pulled out of the project, but was happy it was still going ahead.

She added: “It’s regretful that the services will not be all under one roof but I understand that the town council have their own resources and they have to look carefully at how to spend them.”

The Sherrier Centre was built in the late 19th century and originally used as a school.

It was also the home of Lutterworth Museum for a number of years until 2002, when it moved to the One Stop Shop.

The building is currently used by Leicestershire County Council’s museums, arts and records service.