Controversial plans to radically redevelop Cheltenham could be rescued.

The borough council's Civic Pride scheme looked to be scuppered last week when Gloucestershire County Council announced it wouldn't provide £150,000 to kick-start the project.

It said the proposed closure of Boots corner would lead to unacceptable traffic congestion in other parts of town.

The cash was needed to set up an advisory panel to get the project off the ground.

But speaking at a borough council environment overview and scrutiny committee meeting, Coun John Morris and Coun Rob Garnham said all was not lost.

Coun Morris (LD, Springbank), cabinet member for the built environment, who has led the scheme with Coun Garnham, said: "The position we are in is a serious and concerning one, but that is not to say it's impossible, or that Civic Pride can't happen.

"We believe there is common ground between us. Matters of funding are often removed from and then readmitted to council budget drafts and I think we can work out how to achieve a proper understanding."

Civic Pride includes ambitious plans to turn Cheltenham's Municipal Buildings into a leisure hub, with boutique hotel, restaurants and bars, as well as extensive redevelopment of North Place, Portland Street and Royal Well.

The borough hoped for £50,000 per year for a three year period from the County.

The cash is essential to the scheme's development because a further £240,000, from the South West Regional Development Agency depends on the borough and county working together.

But one element of the scheme, the proposed pedestrianisation of Boots Corner and redirection of traffic to other roads, saw Shire Hall back off.

A report from its officers warned the displaced traffic could increase pollution and congestion in other parts of Cheltenham.

Coun Morris said: "The latest traffic survey, which came out last month, actually says that in one out of three proposals there will be no negative effect from the development.

"It says that in the other two, there are no problems with most elements, but we need more information about the possible knock-on effects.

"That was always our view, because what we voted on in October was to accept the plans in principle, in anticipation of receiving further information on traffic and other matters.

"As that information comes to light, we will be working as hard as we can to make sure the county is on board. I hope that in the near future I will be able to come back and say we have reached agreement with them."

Coun Rob Garnham added: "These are non-political plans and I do believe that the county is committed to the improvement of Cheltenham town centre. I also know that the chief executives of both councils have talked about this more than once. I can't say what was said, but it's very hopeful indeed."

Coun Julie Girling, Gloucestershire County Council's lead cabinet member for environment, said: "Our position has never changed. We're committed to working with Cheltenham Borough Council on the town's regeneration as we always have been.

"A meeting has been organised between members and officers of both councils in January, to discuss the next step. We're also arranging a meeting with the South West Regional Development Agency to clarify the position on the funding of this project."