A £60 million scheme to revamp a Telford college, which would have created thousands of jobs as well as a new fire station, has been delayed by a government cash shortage.

Education and fire chiefs said it was a “total catastrophe” that the plug had been pulled on funding for at least a year. They said the project planned for Telford College of Arts and Technology would have provided “world-class facilities”.

These would, they said, have helped the borough fight its way out of recession by providing work for local people for years to come.

The scheme involved building teaching blocks and floodlit sports pitches at the Wellington campus and relocating the fire station.

The college authorities and fire authority were ready to press ahead – but it depended on a £50 million grant from the Government’s Learning and Skills Council, the remaining £10 million being funded locally.

Doug Boynton, TCAT principal, today said the decision was a “bitter blow” after the college had spent more than two years and millions of pounds on designing the scheme.

He hoped work could still go ahead, but that it would not start until at least next summer, instead of this year as scheduled.

“We are gutted because what the Government has decided to do is suspend all capital grant applications,” he said. “It would have provided hundreds of jobs to build it and thousands for the supply industry.”

He added: “We are in one of the biggest recessions ever, and this would have created work for local people for three years while it was being built and then we would have had world-class facilities in Telford.”

Deputy chief fire officer Paul Raymond said: “We are extremely disappointed.

“Our fire station in Wellington will continue to function as normal.”

Sharon Gray, Shropshire LSC area director, said Telford College was among a number of colleges at the “in principle” approval stage, but there was currently not enough money to fund all the schemes in the pipeline.

By Abigail Bates