AN AMBITIOUS £15 million funding bid towards restoring the Stroudwater Canal from Stonehouse to Saul Junction has been rejected.

The Heritage Lottery Fund has turned down the bid led by the Cotswold Canals Trust, it has been announced today.

With the six mile stretch of canal between Brimscombe and Stonehouse due to be complete this year, the Cotswold Canals Trust wants to restore the missing link of the Stroudwater Canal to bring it within navigable reach of Britain's 2,500 mile network of canals and rivers.

The Trust hoped to start the final four mile restoration via the Gloucester-Sharpness Canal at Saul Junction this year and complete it by 2020 at a total cost of £20 million, but the restoration is now expected to take longer.

Ken Burgin, chief executive of Cotswold Canals Trust, said they are determined to continue with the planned restoration.

"Obviously we are disappointed but the news did not come as a shock," he said.

"We had a lot of encouraging feedback.

"We will take stock and meet with Heritage Lottery Fund representatives to review their feedback and to decide with our partners how we can progress towards a resubmission of a revised bid in November 2016.

"From what we understand, the bid will not need to be radically changed.

"Now that we have come this far, giving up is not an option."

The Trust understands that the bid failed due to competition with others seeking smaller amounts of money.

It hopes to find more match funding towards the project, or cut costs, so that a bid can be made for a smaller amount from the Heritage Lottery Fund.

Val Kirby, project leader, said: "We are determined to keep up the momentum for this brilliant project, that has caught the imagination of both our local communities and that of the boating world.

"The news did not come as a surprise. We estimated we had less than a 50 per cent chance this year and then next year we think we will have a very good chance.

"The HLF have told us that much of the work we have already done is good, so we need to identify the gaps and get busy."

Plans are now in place to start a number of volunteer-led schemes which will reduce the cost of the total project.

It is hoped the restoration will be delayed by no more than one year.

Plans for the project include building a railway bridge, channelling under the M5 and digging a mile of new canal in a bid to bring economic, environmental and leisure benefits to the area.