Community groups and charities in Helston will now only have the chance to bid for a share of £53,000, rather than the full £159,000 from the sale of the Penrose Community Centre.

The cut in cash is after the town council was advised by the Charity Commission to follow legal advice relating to the sale of the former community centre at 3 Penrose Road and how the proceeds can be used.

Last November councillors made up to the full £159,000 available as funding, with 14 organisations putting in bids by January.

Due to a covenant on the building, which carried over with the sale, two thirds of the sale proceeds had to be spent on an “institute of technical scientific instruction”, with the remaining third put up for grabs to anyone – although the full amount was potentially available if a bid could prove it fitted the necessary criteria.

Since then, however, the situation has stalled, with the council attempting to establish the legal course of action and a question mark raised over whether the covenant would be satisfied in this way.

Last week councillors were given a choice: to disperse the third not governed by the covenant, or put the whole sum in an account to purchase land in the future for a building fitting the criteria.

It was agreed that a special meeting be called, at the earliest opportunity, to discuss distributing the unrestricted funds to some or all of the groups that had put in a bid.

The restricted funds will be kept for future purchase of land.

It means, however, there will be less money to now share around – and some groups may miss out altogether.