North Wiltshire District Council was due to exchange contracts with developers Tribecka Land Ltd for the lease on Goldiggers yesterday.

The future of the deal was in doubt after Tribecka missed a deadline to exchange contracts but district council leader Ruth Coleman said officers had assured her Tribecka was still committed to the timetable.

The deadline for completing the deal has been altered, however, to accommodate the summer holidays.

"We set a date in mid August for completion but that was a bit silly because people are on holiday and we do not generally meet in August," she said.

A new deadline for completion has been set for September 2, the day after a planning meeting, when Tribecka will be expected to submit plans for its redevelopment of the site in Timber Street, Chippenham.

Tribecka plans to pull down the art deco former cinema and nightclub, to make way for shops with flats above.

The money received from Tribecka in payment for the site will be used partly to fund affordable housing in north Wiltshire, and partly to support community and youth projects.

Coun Coleman was questioned by members of the public at the meeting of the executive committee last week, lobbying for the building to be retained as a community facility.

But Coun Coleman said the cost of repairing and restoring the building, including a new roof and removal of asbestos, would cost in the region of £2.5 million, which would not include the refitting and running costs.

"If the district council took that out of reserves it would put two per cent on the council tax not just for one year, but permanently," she said.

She said consultations with the leisure industry suggested the building did not lend itself to being converted and no consortium could be persuaded to take it on.

Coun Coleman also argued arts and leisure were not high on the agenda of council taxpayers, according to the results of a People's Voice survey.

"People think we should concentrate on our core activities, like housing and recycling, so we haven't any public mandate for spending that kind of money," she said.

But Ian Guy of Chippenham Stage Lighting said it was important to save the building, a sentiment he said was supported by the results of a survey carried out by the district council four years ago when the vast majority said they did not want it pulled down. "It's too valuable and it would be vandalism," said Mr Guy.

"I haven't looked into the money side of things but I think they have overplayed the amount of work needed to be done.

"I work with local amateur groups and it's crazy having groups from Chippenham travelling to Trowbridge to find a suitable venue."

Tribecka was unavailable for comment.