A village's ambitious dream to create a centre of excellence for the community looks to be over after their fundraising campaign was dealt two serious blows.

Both the National Lottery and Forest Heath District Council have this week refused funding to help villagers in Lakenheath purchase the old Royal British Legion Hall (RBL), which would have paved the way for it to be joined with the neighbouring Peace Memorial Hall.

There is currently an embargo on the sale of the RBL Hall until April 7, to give villagers the chance to raise the £120,000 needed to top an offer on the table from a private bidder.

While the fundraising campaign, spearheaded by Brendan Fulham, has secured almost £40,000 so far, the rejections from the lottery and council could put an end to villagers' dreams.

Mr Fulham, chairman of the Memorial Hall's management committee, said that Lakenheath's growing community was not adequately served by the current facilities in the village, especially given the plans for hundreds more homes.

He added: 'The will of Lakenheath villagers, it seems, will be thwarted at the 12th hour when we were so close to saving the old RBL site for the creation of a centre of excellence. It is not a king's ransom we are seeking – just enough to buy the old RBL site for the village.

'If we secure the funding to secure the site, we will gain the breathing space we need to develop the next phase of the Lakenheath Centre of Excellence. 'If we do not get the funding, we shall have lost forever a valuable piece of land which could be of such a wonderful benefit to Lakenheath.'

Mr Fulham is now appealing to the area's county councillors for help, while Lakenheath Parish Council, which has already pledged £10,000 to the project, could call an extraordinary meeting to examine the village's options.

County councillor Colin Noble said he was 'fully supportive' of the project, but said that times were hard for councils financially.

He added: 'We're struggling to find any funding streams for them. They are being supported by officers and they are talking to other people in the community.

'It is an ambitious scheme, but a wonderful scheme, and would bring back into use a much-loved hall. But these are not easy times, and finding funding for these things is very tricky.'

A spokesman from Forest Heath said: 'This has been discussed in depth and although we will not be supporting the group financially, we are still exploring other options to assist them.'

Plans for the new building included an IT and drop-in centre.