Broadland farmers Louis and Fran Baugh's vision to create a sustainable and profitable business in an internationally-important river valley have been dashed.

Broadland farmers Louis and Fran Baugh's vision to create a sustainable and profitable business in an internationally-important river valley have been dashed.

A decision to slash funding for the Rural Development Programme - part of Defra (Department for Environment, Food and Rural Affairs) - has cost Mr and Mrs Baugh more than £15,000.

They were ready to submit detailed proposals for the family's farm at Neatishead, near North Walsham, when without notice, the funding plug was effectively pulled.

They have spent three years planning a strategy for the 680-acre farm in order to retain the prize-winning Holstein dairy herd, and also provide major environmental, wildlife and social benefits.

The first stage, involving improvements to the landscape and habitat has been completed. It was followed by the new buildings for the dairy enterprise - now almost a rarity in Norfolk.

But, the whole project's viability hinges on the the final and most expensive leg - converting traditional and redundant livestock buildings into self-catering holiday accommodation.

Backing from the Rural Enterprise Grant Scheme would fund the "final part of the holistic jigsaw," said Mr Baugh. "To qualify for this project, you had to incur a considerable amount of expenditure. I don't mind the competitive aspect, but I don't like it when the carpet is pulled from underneath your feet when you have gone through the process."

Mr Baugh, who is a director of breed society, Holstein UK, is furious at the last-minute change in the rules.

"It is the final straw. We've gone through gross mismanagement through the Rural Payments Agency and the gross debacle resolving 2005 issues. Then the debacle over the 2006 applications. And so it goes on," he said.

Their project is backed by the Broads Authority, parish council and many other local businesses.

The arable and dairy farm, home of the 140-cow pedigree Neatishall herd and followers, has two nature reserves as neighbours, Alder fen and broad and How Hill.

"We wanted to create a microcosm of enhanced environment and access together. So, let us now create on-farm accommodation. This helps to make 2 + 2 equal five, six or seven or however much you want to make it."

Mr Baugh has established more than 22km of field margins and about 7.5km of new footpath access.

"We have linked existing rights of way with our permissive paths to create circular walks. We've linked the communities of Horning, Irstead and Neatishead removing walkers from narrow roads," he said.

From the start, they took professional advice for this project, which could cost about £300,000 - hence the need for a six-figure grant to bridge the funding gap. The final project is to convert old cattle and horse boxes and a thatched barn into three units - sleeping a maximum of 16 people.

There would be a single bed unit, one with four beds and the thatched barn into a three-bed unit to run alongside the farmhouse bed and breakfast.

He describes his "pebble in the pond" approach.

"The first ripple is what is on the farm - permissive footpaths, bird hides.

"We want people to have guided access to a working dairy farm, and then self-help walks with pictorial written guides.

"Then the next ripple. We've established new paths to link with the Broads Authority's circular walks from Horning and two circular walks around Alder fen broad and also another walk overlooking How Hill. These have been supported by the parish council and it has been a great success.

"We've put a wildflower meadow in the middle of the village in an open green space which was shown on Faden's map of 1797 - known as Three Hammer Common.

"It has got a hedge which has been dated to the medieval period."

"We've done everything required. We've received planning consent, obtained architects' drawings, reports from structural engineers and quantity surveyors. We were on the point of submitting when this happened."

Mr Baugh, who has briefed the North Norfolk MP Norman Lamb, wants Defra to provide adequate funding for the scheme, which has three more months to run.

Informal indications have suggested that small-scale projects such as farm schemes will pushed to the bottom of the heap when all the projects are considered in August because funding priorities have changed in favour of regional objectives.