The project team have been working hard over the past 18 months preparing a bid for £210,000 from the Big Lottery Fund, only to find they have fallen at the last hurdle.

The project will still go ahead but the budget will be cut to around £400,000.

To save costs some of the materials in the building will be changed, and more volunteers will be found to help with the building work.

The Big Lottery Fund would not say why the project failed, but because of the number of applications not all could be accepted, no matter how strong the application was.

Geoff Hand has been a part of the team working towards the bid.

"We were flabbergasted," he said. "When the officers made a visit they couldn't find any fault with the business plan and praised it to the skies.

"It's all systems go and we will deliver the project on time. We need to get more people outside the village contributing to it, as we have more people using the club from outside the village than in the village."

The plan had been to completely overhaul facilities at the club in Blackboy Lane, with a hall suitable for most types of indoor functions and group activities, public toilets, meeting rooms, a children's playroom, bar, restaurant and changing rooms.

Fishbourne Parish Council chairman Julian Snell said: "Given the delivery plan was drawn up by a team including a chartered engineer, a surveyor, an architect experienced in community hall building and refurbishment, and the person responsible for the building and management of the club over most of the past 20 years we are, to say the least, a little surprised.

"The application was drawn up in consultation with relevant departments of the Chichester District Council, West Sussex County Council and the Charity Commission, all of whom were extremely supportive."

After the rejection, the project team is making an official complaint against the decision.

If successful, it will not overturn the decision but they could be awarded compensation.

Mr Hand added: "We could do without this distraction. We need now to concentrate on how we can best meet the community needs of Fishbourne and the surrounding area which were clearly shown in our consultations.

"We can cut quite a bit of the cost if we are no longer bound by the lottery requirements, and we can look at phasing the building programme, but we also need to increase our own fundraising.

"Ideally, we would welcome a white knight who would ride to the rescue with a generous and substantial cheque.

"If the cheque were large enough, we would be very happy to consider naming the new hall after them."

A Big Lottery Fund spokesman said: "The community buildings programme is highly competitive and receives far more applications than it can fund.

"Fishbourne was up against 200 other applications across England in this round of awards, and the committee has had to make some tough decisions.

Overall the community buildings programme has a total of £50m to award and has had over £607m requested in applications."