A building project at a college in Cumbria has been put on hold after a £30m grant was withdrawn.
Carlisle College was among 131 educational establishments to lose out following funding problems at the Learning and Skills Council (LSC).
Its oldest building, dating from the 1950s, has been gutted prior to demolition to make way for the planned new wing.
The college said it was considering what to do with the unusable building.
Earlier this year it was announced that the LSC - the government agency which funds colleges in England - was facing financial problems.
Applications unaffected
Carlisle College was one of those to have funding withdrawn.
Principal Moira Tattershall said: "We cannot reopen this part of the college as it stands because it has been stripped down prior to demolition.
"The best option is to proceed with the demolition because it's the safest way of dealing with things, but we can't do that until we know there is some way of dealing with the longer term issues.
"So at this point in time we are waiting for further guidance as to what the next steps are."
She added: "It's not having a negative impact on applications this year, but in the longer term it needs to be resolved, otherwise it will have a negative effect on the college."
The LSC had earlier said in a statement that colleges which had lost out would be assessed again in the autumn for the next spending review starting in 2011/12.
"The size and scope of the programme will depend in large part on the outcome of the next spending review," the LSC said.
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