Ambitious plans by a co-operative to take over a village shop and post office have collapsed.

Farnhill and Kildwick Post Office and Village Shop Association and shop owner Michael Hilton have been unable to reach a sale agreement.

The group was set up last August in a bid to raise cash to buy the shop after Mr Hilton announced he was retiring.

A statement from the group said: "The association has made a fair offer to Mr Hilton, based on an independent valuation of the business and premises.

"This offer has been rejected, which is obviously disappointing. However, our offer remains on the table.

"We have both the funding and the support to go ahead with our plans to retain the village post office and store as a community venture."

But Mr Hilton, who has run the shop with his wife for 12 years, has hit out at the offer which he claims was far too low.

"The offer is £20,000 below what I asked for. We are talking silly at the moment," he said.

"They say it's a fair offer. It's not a fair offer by any stretch of the imagination and I am entitled to say no."

He said he had had his own valuation and was prepared to compromise, but not to level the group was proposing.

He said if he accepted the group's offer it would be less than the amount he paid for the business, and he was not prepared to do that.

And he was concerned that the association was relying on cash pledges from villagers. "That doesn't mean the money is there," said Mr Hilton, who said the business was still on the market and was now being advertised in the south of England.

"I would like to see a young couple in here who could put the time into the business which is on the edge of a new era involving the introduction of banking facilities at the sub post office," he added.

The association hoped to get every villager - about 300 - to join the group and pay £10 plus a contribution towards the cost of the business. Its aim was to staff the shop by a mix of part-time paid and voluntary workers.