The company behind plans to build a heritage railway through the heart of Snowdonia has vowed to press ahead with the scheme despite their bid for £7.24m funding being rejected.
The line from Caernarfon to Waunfawr is already open
The multi-million pound project to re-open the Welsh Highland Railway from Caernarfon to Porthmadog is being led by the Ffestiniog Railway Company.
The third phase of the development, from Waunfawr to Rhyd Ddu, is due to be opened by Prince Charles at the end of the month.
But the extension to Porthmadog could be delayed after the Millennium Commission, which helped fund the original project, rejected a bid for extra funds.
However, Paul Lewin, general manager of the Welsh Highland and Ffestiniog Railways, denied it would affect the project in the longer term.
"Before we applied for the Millennium Commission's enhancement fund the date we had in mind for completion was about 2008.
"If the application had been successful it would have accelerated the process.
"But now we are back to the original schedule."
The company applied for funds to contribute to the £15m project in March of this year after the Millennium Commission invited further bids from existing projects for money left over from the sale of the Dome.
"This is a huge project which has been going on for years," said Mr Lewin.
The line has spectacular views of Snowdonia
"We have a team pursuing funds from anywhere we can, including from private investors.
"The Millennium Commission gave us £4m to fund the beginning of the project and we were invited to apply for the extra money.
"Our team will now look elsewhere for the money."
The project to resurrect the railway which closed in 1937 was surrounded by controversy when the plans were first unveiled.
The Ffestiniog Railway Company wanted to open the steam line as a tourist attraction, claiming it would help reduce traffic congestion in the park and would be Britain's 'longest heritage railway'.
But environmentalists, farmers and ramblers said the scheme would ruin one of the wildest parts of Britain and would mean the loss of a popular path.
A Welsh Office public inquiry recommended planning permission should not be granted but the decision was overturned by Deputy Prime Minister John Prescott in June 1999.
He said he was satisfied that the hoped-for traffic benefits of the scheme outweighed the disadvantages and that it was in the public interest to allow it to proceed.
The National Farmers' Union challenged Mr Prescott's decision but their appeal was dismissed by the High Court.
The first seven miles of the new line from Caernarfon to Waunfawr was opened in 2000.
The next phase to Rhyd Ddu is due to be open to passengers in August 2003.
"It was an open and fierce competition," said a Millennium Commission spokesperson who explained existing projects were invited to apply for a final slice of their £32m fund.
"We received applications for extra funding from 191 projects which had been invited to bid for an enhancement grant.
"Around 150 were successful. As in any competition there are winners and losers and this project was not successful."