Tenby's £20million lottery bid, which would have paid for the transformation of St Catherine's Island and part of the harbour, has been unsuccessful.

Pembrokeshire County Council has been told by the Big Lottery Fund that the ambitious bid - which hoped to make the island into an 'iconic attraction' - has failed to make the final short-list.

The scheme envisaged the island fort becoming a glass dome-topped coastal interpretation centre, with 'real time' camera links to the landscape and fauna of the National Park.

A walkway across to the island, low-water landing facilities, restoration of Tenby Harbour's arches and refurbishment of the sluice, a permanent link across to the island and new low-water landing facilities all featured in the partnership project, which had a total cost of £25million.

Disappointment at the decision has been expressed by Councillor Rob Lewis, Cabinet member for sports, leisure, tourism and cultural services, especially as the concept proved so popular with local people.

He said this week: "We always knew our bid was up against a lot of competition across the UK, and that only around six schemes would be forwarded for a final grant, but we had hoped it would progress further.

"What particularly pleased us was local reaction to it. I have never known a project which seemed to attract such widespread support and enthusiasm. We received very little opposition to the scheme.

"It certainly seemed to us that - locally, at least - we got it right."

The council, which was leading the project, hoped it would provide the catalyst for improving quality and investment in the town's buildings and businesses.

Councillor Lewis said the authority would now review its proposal and examine whether 'mode modest elements' of the scheme could still be brought forward.

He added: "The exercise has emphasised the importance the local community in Tenby attaches to its harbour area and St Catherine's Island.

"We need to make the most of such important features, both for them and for visitors."