PLANS for a peace park on the Tyrone/Donegal border have been hit by the withdrawal of EU funding.
The Riverine project aimed to transform an area between Strabane and Lifford through the creation of river promenades, bridges and play areas.
It is linked to a wider £50 million retail, hotel and wildlife scheme at the site of one of a notorious military barracks and checkpoint, known locally as the Camel's Hump.
The area, which was scene of several controversial killings during the Troubles, is now best known to passing motorists as the home of the 'Tinnies' sculptures.
'Physical infrastructure' for the Riverine scheme had been reliant on a E 6m grant from the Special European Programmes Body (SEUPB).
More than E 1m from the International Fund for Ireland has already been spent to strengthen cross-border relationships between communities and schools.
However, SEUPB has now announced that it does not have enough funds.
A spokesman confirmed: "While the SEUPB recognises the merits of the project it is not in a position to issue a letter of offer.
"The [Peace III] Programme, which ends in 2013, has a finite budget and is now fully committed."
Campaigners have expressed anger, claiming supporters were told that the Peace III money had been "used up" by schemes for Belfast's Girdwood site and the Apprentice Boys Memorial Hall in Derry.
West Tyrone MP Pat Doherty said it was an "extremely disappointing setback" but called for the exploration of "every available avenue" to get the project back on track.
"While the Riverine project had met the scoring threshold for funding, the body had now insufficient funds to support the project due to the withdrawal of funding from the Department of Environment, Community and Local Government in the 26 counties to match that provided by the assembly executive," he said.
He said he has formally appealed the decision "as I do not feel all avenues of potential funding streams have being exhausted".
Community worker Paul Gallagher said there is "deep disillusionment and anger" over the news.
He said people feel the area is repeatedly losing out on public money, citing a decision to site the Department of Agriculture headquarters at Ballykelly "despite (Strabane) top-ping the department's own criteria list" and the stalling of the A5 road scheme.
Mr Gallagher said the Riverine project would have been "a real demonstration... that the peace process had finally shown signs of reaching this seriously disadvantaged area".
"On the evidence it seems that their recent decision-making approach could be best summarised as 'anywhere but Strabane'.
"This is hard to swallow given that 18m was found with the executive's support to build a bridge in the middle of the countryside at Narrow Water."