A £3.5 million revamp of a North Yorkshire nursing home is uncertain after funding was blocked.

The scheme, supported by North Yorkshire County Council, Harrogate Borough Council and the Hanover Housing Association, was intended to create extra care housing and affordable accommodation for homes at Knaresborough's Manor Grange home.

But the Housing Corporation, a Government body which is overlooking the scheme, has turned down the application for funding because of a lack of resources.

A spokesman said the bid would be reconsidered next year.

He said: "This is a complex scheme which required a considerable amount of consultation with the local authority, Hanover Housing Association and ourselves.

"We have now agreed that the bid is at the stage where it can be resubmitted in October for consideration for funding in 2002-2003."

It means the work cannot be completed before summer 2003 at the earliest, a year later than expected.

The news has left partners disappointed.

Barry Anderson, of Hanover Association, said: "We felt we were all ready to go."

And Neil Revely, of the county council's social services department, said: "We are concerned about the delay because of the uncertainty for residents and day attendants at Manor Grange.

"Their anxiety is shared by relatives and staff. We all hope that a new bid can attract the funding for next year.

"In the meantime, however, the home will continue to offer the high standards of service for which it is renowned."

Updated: 08:30 Wednesday, September 05, 2001