INFLATION could send the bill for the restoration of a cherished North-East landmark soaring over the £11m mark, it was revealed yesterday.

The initial estimate for the restoration of Harrogate's Royal Hall - needed because of crumbling concrete affecting roof and floors of the 98-year-old hall - was put at £8.5m.

But this has already been revised to £9.6m to cover any unforeseen bills on what officials admit is a "risky" project.

Stuart Quin, deputy director of Harrogate International Centre, said that, because of this, the bid being drawn up for submission to the Heritage Lottery Fund should include a "high contingency figure and inflation costs to cover the period to 2005".

He said: "Failure to secure a maximum amount of grant would make the capital costs unaffordable to the council.

A 75 per cent grant would mean the council finding £2.8m, but this could rise towards £4m if some elements of the bid were rejected - out of an annual council budget of £18m.

Mr Quin will tell a cabinet meeting on Wednesday that at £2.8m, the restoration could be "realistically funded". But the prospect of finding £3.94m was "highly doubtful".

The hall, listed for its historic interest, is a vital cog in the council's conference and exhibition business and is also used by local groups for shows.

A public appeal for £1m has brought in £22,455 so far and the council, which hopes for a bigger response over the coming months, is expected to push ahead with an initial Lottery bid for three-quarters of the £670,000 needed to carry out investigative and design work.

A major cash bid would follow later.