A campaign has been launched to revive Otley's failed bid for Lottery cash to fund a £1.6 million sports centre.
The town's Mayor, Councillor John Eveleigh (Lab, Otley and Wharfedale) has branded one reason given by Sport England for rejecting the funding application as "absolutely outrageous''.
He has started a petition asking for the bid to be reconsidered and says a suggestion that the plan lacks support is a "massive slur on Otley's reputation''.
Leeds City Council's leisure services department applied to Lottery money distributor Sport England for funding to improve public sports facilities at Prince Henry's Grammar School.
The plans, approved by the Council, include refurbishing the swimming pool, sports hall and tennis courts and providing a new fitness suite, all-weather pitches and changing rooms.
The facilities would be open for use by the community and run by the leisure services department.
But Sport England has said grant support will not be given. It cites several contributory reasons, including concerns over the project's long-term viability.
Its adds: "The application did not justify a strategic need for the proposed facility, demonstrated by the lack of committed support from the local community, significant partners, potential users, clubs and governing bodies.''
But Councillor Eveleigh said: "It is simply not true. Throughout the whole process the leisure services department of Leeds City Council has worked very closely with the school, Otley Town Council, Otley Sports Council and local residents.
"The whole town is behind the need for a sports centre and for the report to suggest that the scheme is unviable and lacks long-term sustainability is absurd. It's a massive blow to the town and we'd like them to think again.
"There were concerns from some residents about floodlighting and pitches but that was taken on board and they were moved to an area that wouldn't affect residents.''
A spokesman for the Council's leisure services department said: "We received a response from Sport England rejecting the bid.
"We are very surprised by their decision and are currently considering what action to take.''
John Steel, headteacher at Prince Henry's, said: "I'm extremely disappointed because we're really committed to the development and our support has never been in doubt.''
A spokesman for Sport England said: "It's our role to encourage more people to play sport but there isn't a bottomless pot of money and we get loads of applications, so we have to have specific criteria to enable us to prioritise them.''
She said factors taken into account when considering bids include the availability of other local sports facilities, how many people will benefit from them, projects' long-term sustainability and value for money, the scope for sport to be developed through links with other organisations and the level of committed support from other groups.
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