Plans to restore one of Wales' oldest town houses to its former glory have been dealt a blow after a bid for a £1.4m grant was turned down.
The Welsh Assembly Government has funded some work at the house
Llanelly House, built in 1714, was the Welsh finalist in the original series of BBC Two's Restoration programme.
It failed at the final hurdle but there are still hopes it could be restored.
Project director William Wilkins said a Welsh Assembly Government decision not to award the grant would delay the project, but not stop it.
"It puts the brakes on the project but it does not bring it to a grinding halt," he said.
"We are very disappointed but I have to say we are appealing the decision because we think the basis of the decision is fundamentally unsound.
"Very importantly it was always our plan to go to the Heritage Lottery Fund for a large portion of the funding and that application is on track and we hope to make it in the course of next month."
William Wilkins with Laurence Llewelyn-Bowen at the house
Llanelly House, championed by television celebrity designer Laurence Llewelyn-Bowen, lost out to Manchester's Victoria Baths in a public vote for the television series' £3.4m first prize.
Since then archaeologists have, in effect, gutted the building by stripping it back to its 18th Century internal lay-out.
Llanelli Town Council has continued to press ahead with plans to create a cultural and heritage centre.
The Welsh Assembly Government and Cadw financed the costs of preparatory works for the exterior.
An assembly government spokesman said the latest proposal had been fully assessed, but demand for such grants was competitive and funds had gone to other projects.
He said the project had failed to score highly in key areas.
Mr Wilkins said he remained confident the plans would be realised.
He added: "We are perfectly capable of creating a reconstructed early 18th Century building of really spectacular quality.
"We will have a mix of heritage and educational use in the house together, I hope, with one of the most beautiful cafe/restaurants in Carmarthenshire."