Plans to turn a town’s key historic building into a boutique hotel and winery centre have proved too ambitious.

Richard Balfour-Lynn, co-founder of the Hush Heath winery in Staplehurst, had previously persuaded Maidstone council that he could convert the 12th century Archbishop’s Palace in the town centre into a boutique hotel with an associated wine and viticultural education centre to focus attention on English wine and spirits, and Kent producers in particular.

Mr Balfour-Lynn had said the project would put Maidstone at the centre of a wine tourist map - similar to the likes of Napa Valley in California, Margaret River in Australia and the Champagne region in France.

He was quoted as saying: "The Archbishop’s Palace will become both the champion and beating heart of Kent wines, spirits and local food produce.”

However, 16 months after his company was given exclusive rights to develop plans for the Grade I listed building next to All Saints Church, councillors have learnt that Balfour Winery has withdrawn from the project on the grounds that its investigations suggested it would not be economically viable.

Mr Balfour-Lynn said: "It is with real reluctance that we have had to move away from our plans for the Archbishop's Palace.

“This is not a decision we have taken likely, but instead the result of a number of key issues outside of our control. Firstly, the archaeological remains found during our survey of the site make redeveloping the palace uneconomical, particularly when added to the inflation we've seen across building materials. Added to that have been issues with getting services to the site, namely water and electricity, which have also added large additional, unforeseen costs.”

“Ultimately, the headwinds we are all facing right now have made this project undeliverable - but I would like to personally thank everyone for their hard work and tenacity in trying to turn this beautiful building into what would, I'm sure, have been a stunning venue.

“However, we remain positive about our plans for Balfour Winery and our network of 10 superb Balfour pubs and inns to deliver on our overall aim of turning Kent into one of the must-visit winery destinations in the world."

The firm’s withdrawal was apparently conveyed to MBC in March, but has only just been revealed publically.

It has left the council scrambling to find a viable alternative for the building that was once used to jail the 1183 Peasants’ Revolt preacher John Ball.

The palace had been leased to KCC as a register office and inquests court, but the authority withdrew from the lease in March this year.

Since then, the building has been used by staff from the council’s own parking services department but that is bringing in no income.

It is estimated business rates and maintenance will cost £250,000 a year, money the council can ill-afford.

Cabinet member Cllr John Perry (Con) told members of the corporate services committee this week that the plan now was to seek an operator who would use it as a wedding and events venue.

But Cllr Perry warned that the council would first have to invest in the property because an events use would need the building to have a commercial kitchen installed. The likely cost of that was withheld from the public, but is apparently known to the council as a result of Balfour’s investigations. Architects would be engaged to draw up a plan and to consult with English Heritage for a kitchen on the ground floor.

Cllr Perry described the new idea as “something which could very well work” but he stressed the need to gain some revenue from the building to cover the “sunk” costs.

Cllr Martin Cox (Ind) admitted: “A big part of me is glad that we are now going down this route and not the other winery route because it will help to keep the building open to the public. It will be accessible to all and not perhaps just the more elite.”

Cllr Paul Harper (Fant and Oakwood Independents) reminded the council of the importance of the building. He said: “It is the reason why there is a town here. The town grew up because there was an Archbishop’s Palace, which led to a market, which led to the development of Maidstone to become the county town of Kent.”

Cllr Harper queried why the council was not reverting to the use that had been the most popular with the public in a 2021 consultation that had attracted 2,000 responses – a mixed cultural use.

The answer was that officers did not believe that it would bring forth a viable bid.

Cllr Harper said: ”One of the most popular uses proposed by the public was to have a cafe by the river. If we are installing a kitchen anyway, can we also open a cafe there?”

Cllr Perry dismissed that idea as potentially discouraging bidders for the wedding venue use.

The council will seek bids from potential operators and hopes to decide on a new partner in November.

But the council’s chief finance officer Mark Green warned: “We don't know if we will get an offer that is sufficient.

“We’ll have to see in November if the proposal stacks up financially.”

KCC had been paying an annual rent of £100,000.