PLANS to transform a delapidated bus depot into a multi-million pound museum, shopping destination and cafe have been scrapped.

Colchester Council has given up on seeking funds to build the Wonderhouse on the old First depot site in Queen Street, Colchester, after the Heritage Lottery Fund rejected its second bid for cash.

Rather than stumping up seven figures, the Lottery is thought to have offered the council around £10,000 for a pilot project.

A previous bid for funds was rejected in October.

Councillor Tim Young, portfolio holder for planning, community safety and culture, said the museum would be shelved but shops and restaurants could be built on the site instead.

He said: “We have cut our losses and said okay, it’s clear we won’t get major funding.

“I think it’s all open for whatever now. I think a mix of shops and restaurants would be appropriate.

“We need to get together very quickly and come up with an alternative plan.

“Time is of the essence because we don’t want it looking like it with Curzon and the Creative Business Centre on the way.”

He added: “When we got the first feedback, it was very encouraging and that made us think we would resubmit another bid.

“They clearly were not as enthusiastic as their letter suggested.

“I just don’t think Heritage Lottery Fund were quite ready for something that imaginative.”

Mr Young claims the council stashed away around £300,000 to put towards the project.

Instead of being used to develop the site, some of the money will go towards finding a new home for the Museum Resource Centre in Ryegate Road.

To tie in with the Wonderhouse, the Arts Council provided £660,000 to fund seven museum trainees for three years, who could have worked at the new venue.

The trainees will now continue to work at the Museum Resource Centre, Colchester Castle, Rowan House and in Ipswich.

Mr Young said: “We will progress with certain aspects of the Wonderhouse concept, including the training museum.

“I think it will happen one day, somewhere.

“These young people are bringing such vibrancy and energy to our staffing.”

He added: “Some people will be very disappointed it’s not going ahead, others that have been critical might be quite pleased.”

Colchester Council bought the former First depot, in Queen Street, in 2014 and unveiled plans to turn the first floor into a museum with six shops and a cafe downstairs last January.

A number of “internationally significant” artefacts, which are in storage because there is no place for them at Colchester Castle Museum, were set to go on show there.