The Cliffs Pavilion was not deemed needy enough for a £12 million lottery handout, it emerged today.

The theatre in Station Road, Westcliff, planned a massive expansion but was dealt a devastating blow by the Arts Council in July when it refused to allow it to go ahead with its bid.

At a fact-finding meeting with Southend Council chiefs, the Arts Council hinted the area was not generally perceived to be a cultural desert and so money was refused - despite the fact it had already handed over £850,000 to draw up detailed plans.

John Dallaway, Southend's leisure director, said: "The general view expressed to us was that there were 46 schemes allowed to move forward to make applications but 400 schemes of various sizes around the country were not permitted to continue.

"The Arts Council was saying there were not enough resources to fund any more than 46 schemes but it was working on a second capital programme which will be for smaller schemes.

"What the Arts Council tried to do was match its resources to perceived areas of greatest need around the country. The other schemes, including Southend, were not considered to be of greatest need.

"We did put across to them very strongly a range of issues including how this council has been earmarked as an education action zone and is being considered for European Objective Two funding for needy areas.

"We also highlighted the work of this council in turning the Palace Theatre from financial dire straits in just nine months. These were elements the Arts Council was not familiar with."

The Arts Council made it quite clear it could not reconsider Southend for the phase one funding but did allow the council to use the outstanding £228,000 from the original lottery award to carry out a rethink with a view to applying for phase two.

However, the maximum amount available under the second bid could be up to £7 million which would mean a dramatic scaling down of expansion plans.

Council leader David Elf said clearly the Arts Council did not have all the facts about Southend when it made its decision.

At a cabinet meeting, he said: "I think quite frankly, the Arts Council had no answer for us and it was shamed into letting us spend the money left over from the lottery grant. Quite clearly, the way they dealt with this issue is quite scandalous."

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