AN independent report has confirmed a Dales youth hostel threatened with closure has a viable future - but only if cash can be found to help cover the costs of a radical overhaul.

Aysgarth was among ten properties earmarked for the axe by the Youth Hostel Association (YHA) earlier this year.

The news prompted an outcry from the Wensleydale business community; many claimed they could ill afford to lose the 7,000 tourists a year who use the facilities, specially in the wake of the foot-and-mouth crisis.

Backed by North Yorkshire County Council, the Yorkshire Dales National Park Authority and Richmondshire District Council, the YHA was persuaded to agree to a stay of execution.

All four organisations have since been locked in negotiations over alternatives while independent consultants were called in to examine the case for keeping the building open.

Business Link York and North Yorkshire has concluded the hostel could increase its throughput by 50 per cent if the dormitory accommodation could be adapted to offer smaller, family-friendly rooms.

Bolt-on facilities such as an internet caf, meeting rooms and a community advice and information point and better access for the disabled are also among the recommendations.

However, the estimated bill is put at around £500,000 - and that would have to be met through grants.

The YHA has already insisted the foot-and-mouth crisis cost the association £5m and Aysgarth was on the cost-cutting hit-list as it was said to be among the most expensive to upgrade.

However, regional manager, Simon Ainsley, was upbeat about the consultants' findings yesterday.

''We welcome the recognition that the youth hostel at Aysgarth could have a viable future,'' he said. ''With this report, we will be able to continue our discussions with potential external funders.''

Possible sources of income could include grants from the county and district authority as well as Europe.

Seven other hostels earmarked for closure are now on the open market. Aysgarth - along with Dufton and Holmbury St Mary - have not yet gone on sale, although earlier this year, the YHA indicated the position may change if no alternatives could be confirmed by the end of the year.