Grade One listed building, the Old Market Hall at Llanidloes was built in the sixteenth century and it is the last surviving building of its type in Wales.
The market hall is owned by Llanidloes Town Council and let on a long lease to Powys County Council (PCC).
It housed the local museum for many years and since 2003 has been home to a visitor attraction commissioned by PCC and created by Dr Charles Keightly known as ‘A Celebration of Timber Buildings’.
The exhibition was designed and created with the help of a Heritage Lottery Fund (HLF) which gave PCC a grant to refurbish and develop the building into an attraction.
The exhibition is now threatened with closure as PCC has withdrawn its annual grant of £3,850.
PCC say that all the Old Market Hall committee has known about the decision since 2016 and funding has been reduced in steps over three years.
Llanidloes County Councillor, Gareth Morgan, a retired solicitor, said he has examined the agreement entered into between the parties, and the terms of the Heritage Lottery Grant.
He said he believes that PCC is in breach of its agreement with the town council and the terms upon which it received a grant from the HLF.
Councillor Morgan, said: “I am shocked that PCC should pay such scant regard for its legal obligations, for an attraction that brings in large numbers of visitors to Llanidloes every year.”
Councillor Morgan added that the town council has received independent legal advice which recommends they should seek to take steps to enforce the agreement against PCC.
A spokesman for PCC, said: “In 2016 as part of budget decisions the county council decided to reduce the annual grant paid to the Old Market Hall in incremental stages.
“Reducing the grant from £3,850 in 2016/17; to £2,550 in 2017/18; then £1,250 in 2018/19.
“The committee was informed of the decision in 2016 and confirmed in writing that they understood the grant would end and they would receive no further funding from April 1 2019.
“The decision was subject to legal advice."
Until the nineteenth century the hall was a busy centre of the Welsh woollen trade.
The wool market was in the upper room, which was also used as a court of law and a preachers hall.
Part of the building was also used as a jail.