Redevelopment plans costing ВЈ26m for construction's main training college failed to make it onto the LSC's shortlist of 13 schemes as part of the Further Education capital funding programme.
Backers of the NCC will have to resume their fight for cash in the autumn when the LSC will start drawing up funding plans for the next spending review period starting in 2011-12.
The NCC is one of 79 projects which had already received approval in principle from the LSC before a huge hole was discovered in its finances.
Andy Walder, NCC Director, said: "If we can not find funding for this project it means a huge loss for both industry and the region. The NCC is of major national and regional significance, delivering unique training that is not available, and can not be delivered anywhere else in the UK.ADVERTISEMENT
"Our project met all the LSCвЂ™s вЂreadiness to start buildingвЂ™ criteria вЂ“ with full planning permission, a strong design team, detailed build designs and all other funding sources in place for a planned start on site of Autumn 2009. We had already stripped away aspects of the project that were not essential. The remainder of funding вЂ“ outside the LSCвЂ™s contribution вЂ“ is already in place, including funds already set aside by the College and grant money from the East of England Development Agency.
"The National Construction College trains 30,000 adults and 800 apprentices every year, across the UK - the majority trained at NCC East. The CollegeвЂ™s facilities are over 70 years old and in urgent need of redevelopment. Without this funding the college cannot continue to provide the training support the construction industry urgently needs. We are now actively seeking talks with the LSC to ensure they understand the unique nature of this project and to discuss how we can secure the redevelopment."