Kathryn CrossAn application for lottery funding to restore the Dereham Windmill has failed for the second time.But the trustees said that they were not defeated and there were other 'irons in the fire' to save the historic landmark.Kathryn Cross

An application for lottery funding to restore the Dereham Windmill has failed for the second time.

But the trustees told the EDP today that they were not defeated and there were other 'irons in the fire' to save the historic landmark.

It was hoped that the bid for �338,000 to the Heritage Lottery Fund would enable the mill to grind corn again, one of only a handful in Norfolk. The money would have been put towards restoring the sails, some new internal machinery, windows and doors and upgrading the electrics, fire safety and alarms. They also wanted a large plasma screen on the ground floor to allow disabled people to see other parts of the windmill.

Robyn Llewellyn, head of HLF East of England, said: 'Whilst we recognised the historic importance of the Dereham Windmill, we had concerns about the project, particularly the long-term sustainability of a new visitor attraction in the area.'

But Geoff Hayton, chairman of Dereham Windmill Friends, said the project was fully sustainable.

'All we need is 44 people per weekend for half the year,' he said. 'There are no other visitor attractions in this area other than the Mid-Norfolk railway. All the money in Norfolk gets spent on the coast and the problem is you cannot encourage tourism inland unless you have something to show them. We wanted to work with Gressenhall Rural Life Museum so that we could grind the corn they grew into flour and send it back for children to bake in their ovens.'

He said when they submitted an application in December last year for �1 million of funding, which also failed, a lottery consultant came out to the windmill and estimated they could see 5000 visitors a year.

'That shoots them down in flames,' he said. 'Most of their arguments don't hold water. We did all our sums and all our homework and had it double checked by accountants.'

Mr Hayton added that they were looking at other avenues and hoped to release details of the next plan after Easter.

'We are not giving up because we think it is a worthwhile project and if we don't do something it will fall down. Nothing is dead yet, apart from six years of my life down the drain.'

Tony Needham, clerk to Dereham town council, said they would continue to work with the Friends to identify the best way forward.

He said: 'It must be very disappointing for Geoff Hayton and his colleagues to see their work come to nothing. Applying for funding is a very competitive process, particularly with a project of this size. I have come across projects which have been turned down on several occasions before they are finally successful, so this is not necessarily the end of the story.'