THE Forest of Dean has been dealt a hammer blow after missing out on funding to rebuild schools in the area.

Forest schools had hoped to win a share of an £80 million grant to revamp or rebuild three local secondaries and create a new sixth form and pioneering skills centre for teenagers.

But Gloucestershire County Council narrowly missed out on the funding from the Building For Schools programme.

Education chiefs say they are "dismayed and disappointed" after the county came seventh out of 19 authorities competing for six places on the next phase of the programme.

The news is also expected to be a blow to regeneration chiefs who had hoped a brand new education hub at Steam Mills could act as an anchor for their £14.75 million masterplan for Cinderford.

Officials from the Homes and Communities Agency are keen to see something in place before work starts on a planned new link road and RFDC now look unlikely to get the money for a new building.

Graham Morgan, chairman of the Regeneration Board, admitted: "I'm not sure how significant it is yet but it is a worry. I don't know where it will leave us because we need a linchpin for the road scheme. We have got the promise of money for the road but unless there is something down there, they may not want to pursue it. "

The BSF building plans involved revamps of Heywood, Dene Magna and Lakers schools.

Heywood headteacher Ken Bush said lack of money for new buildings will not stop the creation of a National Challenge Trust between Dene Magna and the Cinderford school which is due to start this September.

"It is a disappointing result for Heywood and the Forest generally," he said. Building schools for the Future was not just about Heywood and Dene Magna, but around bringing providers in this part of the Forest together to develop things collaboratively.

"But we always knew it might not happen and we will move on using the resources we have."

BSF director Geoff Black said there was still a vision for the Forest.

"We are upbeat in the sense that although we're back to where we started, BSF isn't the only source of funding," he said.

"Even in these relatively straightened times there are still priorities, for example in teaching skills and in regeneration. These could attract funding from other sources.

"The will to make things happen is key although the ability to change buildings and sites is now uncertain and we can no longer guarantee funding to make these changes.

"It's worth bearing in mind that a school is only as good as its staff and pupils and that its buildings don't necessarily affect that."

The next round of funding is in January 2011 but Gloucestershire's education chief Jackie Hall warned a change of government could lead to the national BSF scheme being scrapped. She said: "We just don't know what will happen at the moment. We have not got a Plan B, because we cannot afford the investment of £80 million on our own. We will have to look at our capital funding and see what can be done."

If the Conservatives come to power, they will divert money from Labour's BSF programme to new Academies. Forest MP Mark Harper said: "This is a real blow for the Forest."