Ambitious plans to redevelop Caerphilly town centre and Bargoed town centre have been thrown into doubt after a bid for Welsh Assembly funding was turned down.
Caerphilly County Borough Council had submitted a bid to the Welsh Assembly Government for funding through the Strategic Capital Investment Fund (SCIF).
It was hoped that the money would be used to progress the two major development schemes.
Councillor Ron Davies, cabinet member for regeneration, said: “We are bitterly disappointed to find out that these vital regeneration schemes are not being supported.
“We hoped that the money could be used to kick-start the developments, but we now have to seriously consider the way forward in light of this devastating news.
“We have been working hard to progress both schemes and a lot of investment has already been committed, especially in preparing the Bargoed retail development site.
“The local communities in Bargoed and Caerphilly will obviously be as disappointed with this news as we are, but I would like to assure those involved that we will now move forward and do everything possible to either get the schemes back on track, or to review the plans and revised them as appropriate.
“Each locality has different issues and I will meet with the key stakeholders in the coming weeks to discuss how we can work together to build these two areas into vibrant town centres.”