A popular youth hostel - threatened with closure in a swathe of cuts a year ago - has been given another stay of execution.

Aysgarth was among ten premises earmarked for the axe when the Youth Hostel Association (YHA) announced it was having to rein in its horns in the wake of the foot-and-mouth crisis.

Last January, the charity claimed it had lost £5m in 2001 and, if it didn't sell some of its older buildings, a sweeping modernisation programme would be in jeopardy.

A spirited campaign for a change of heart proved enough to persuade the board to give Aysgarth another chance.

Local people claimed 3,000 bed nights year should be proof enough that the facilities were still well used.

As a result, the YHA agreed to a partnership with the Yorkshire Dales National Park Authority, Richmondshire District Council and North Yorkshire County Council which would try to find the £500,000 needed to cover the cost of modernising Aysgarth before the end of February this year.

But money has proved a stumbling block and - with the costs now thought to be as high at £700,000 - a question mark was hovering over the Aysgarth hostel's future when the deadline expired at the end of last week.

However, when the YHA board met yesterday, it agreed Aysgarth will be allowed to remain open for the remainder of this year while the hunt for cash continues.

"The board felt that, as applications for grants had been made, we can not make a decision until the result of those applications is clear one way or the other,'' said chairman, Chris Boulton.

However, he warned: ''We cannot leave this situation indefinitely."

The panel which decides how European regeneration grants are spent across the region has also agreed to shelve a decision on funding until next month.

''There appears to be some uncertainty over funding to match an Objective 2 grant as we have been led to believe Yorkshire Forward may not support the restoration of the Aysgarth Youth Hostel,'' said Decisions Panel member and Wensleydale district and county councillor, John Blackie.

''As a result, we have agreed to put off a decision until April 14 when we hope the financial position will be clearer.''