A plan to transfer the Cuillins mountain range on Skye into public ownership looks to be under threat.
Dunvegan Castle is in need of repair
Clan chief John MacLeod of MacLeod had been negotiating to hand over the
Under the transfer the clan seat Dunvegan Castle, on Skye, would be transferred to a charitable trust.
However, Highlands and Islands Enterprise (HIE) said it could not afford refurbishment to the 800-year-old castle, which could cost £19m.
HIE has remained supportive in principle for proposals to repair the residence of the chiefs of the clan MacLeod and continue its development as a
major tourist destination.
But it said the very high estimated cost was likely to be beyond its means and that of other public funding bodies without significant private sector contributions.
Other options are now being explored.
HIE, along with the MacLeod Estate and Highland Council, had spent the last year investigating the current proposal, which would have given the charitable trust responsibility for raising the funds needed to repair and refurbish the castle, which is Scotland's oldest continually inhabited home.
A feasibility study into the refurbishment of the castle and redevelopment of its visitor facilities by Edinburgh-based architects Simpson and Brown found the castle to be in a very poor structural condition and the visitor amenities in need of upgrading.
The consultants concluded that the "best option" for repair and refurbishment would cost £19m.
Andrew Anderson, of HIE's strengthening communities group, said: "The best option has been costed and is probably beyond the ability of funding agencies to achieve.
"However, HIE is still very supportive of the aim to restore the castle and transfer the Cuillins to public ownership and will continue to investigate how restoration of the castle as a visitor attraction can be carried out."
Options identified by the architects also included opening more of the castle to the public, making it accessible to disabled visitors and providing accommodation in the castle for the clan chief.
Several years ago Mr MacLeod tried to raise renovation funds by putting the Cuillins on the market for £10m.