The man leading the restoration of the Maid of the Loch paddle steamer has admitted the whole project's future "hangs in the balance" after a bid for lottery funding was rejected.

John Beveridge said he and his colleagues from the Loch Lomond Steamship Company, the charity behind the Maid's restoration, were "devastated" after the Heritage Lottery Fund (HLF) rejected their application for £3.64 million – sinking hopes of getting the Maid back cruising on Loch Lomond next year, for the first time since 1981.

The news comes after the charity raised more than £2m towards the overall £6m cost of the Maid's restoration.

Mr Beveridge said: “We are absolutely devastated with HLF’s decision. It’s going to take some time to absorb this news and the reasons behind it.

"Unfortunately, this decision jeopardises the whole project and our vision for refurbishing the ship now hangs in the balance."

Lucy Casot, head of the HLF in Scotland, said: “Returning the paddle steamer to full operation is a complex and specialised project with many challenges and risks.

"Unfortunately, in this competitive situation the board felt that other applications for funding were stronger and they were unable to support this project.”

Mr Beveridge added: “Our team of dedicated volunteers, our board of directors, tour guides, maintenance and so many more hard-working and passionate individuals, have worked incredibly hard over the past 22 years to protect and preserve our much-loved paddle steamer.

"To have to explain to them that we won’t be sailing next year after all is extremely tough."