Cheshire East has backed calls to ask the government for the plug to be pulled on Crewe's Lyceum Powerhouse project.

The proposal was for a state-of-the-art live music venue and creative skills centre and was part of the Towns Fund programme – but soaring costs have resulted in Crewe Town Board calling for it to be scrapped.

If the government agrees to the request from the council and the town board to remove the scheme from the Towns Fund programme, the £4.998 million funding will be re-allocated across the remaining projects in the programme.

Crewe councillor Marilyn Houston (Labour), told the meeting of the economy and growth committee this week: "We're now in the hands of the government to do with the Towns Fund.

Cllr Marilyn Houston (Cheshire East Council).

"We've got a package of very exciting projects within that that's being overseen by the town board."

She said it was understandable there were financial issues because building costs had gone up and added: "I am concerned now that we're very much on a cliff edge, in that we're going to have to wait for the outcome of the request to government to agree to the plans that's been put together by the town board."

Cllr Houston asked how strong the support was from the town board for the proposal being put forward to the government, regarding the Lyceum Powerhouse.

Councillors are not allowed to attend the board meetings at all unless they are members.

Macclesfield councillor Nick Mannion (Lab), who is a member of Crewe Town Board because he is chair of Cheshire East's economy committee, replied: "The independent evaluation report that was considered by Crewe Town Board received overwhelming support. It was probably one of the toughest decisions the town board has had to make."

Cllr Janet Clowes (Wybunbury, Con) wanted reassurance that the cash allocated to the Lyceum Powerhouse scheme would definitely be reallocated to other projects in the Towns Fund.

Cllr Janet Clowes (Cheshire East Council).

"I wanted some confirmation my understanding is correct – that in these very difficult circumstances government are not actually retracting the monies they have already given us, they have simply said there is no more and you must manage it as best you can," she said.

"I welcome the fact they are not removing it, but it is up to us to get our best value for money and to deliver those projects we feel best deliver for Crewe."

Peter Skates, the council's director of growth and enterprise, reassured the committee the funding is still there.

The committee agreed to ask the government for permission to remove the Lyceum Powerhouse project from the programme.