BURNLEY's run-down canalside area could benefit from £2million lottery cash.

Burnley Council is to bid for the money to restore historic mill buildings alongside the canal for new uses.

Development land would also be used to create a new leisure and employment area.

In particular, the scheme would include the repair and refurbishishment of buildings including Slater's Terrace, Lords printers and Finsley Wharf, which are considered to be among the most interesting in the conservation area but also the most run-down.

Last month English Heritage awarded the council a grant to commission consultants to prepare the first stage of the bid for funding under the lottery's Townscape Heritage Initiative.

Grants range from £250,000 to £2million and the council is expected to ask for the maximum amount.

The council's Executive Committee will be asked to back the proposals to bid for the regeneration cash when it meets on Tuesday.

The council would have to find match funding for the project, which would also need the support of the private sector.

Attempts have been made by the council in the past to spark regeneration in the town's canal corridor, but these failed due to low confidence among investors and lack of market interest, which led to loss of grant support.

But it is hoped the announcement of £15million Government money for housing regeneration under the Elevate programme will make Burnley more appealing to investors and businesses.

Council planner Erika Eden-Porter, author of the report to the executive, said: "The conservation area includes a fine collection of well-preserved canalside architecture and engineering features and is widely recognised as one of the most important industrial conservation areas in the North West.

"However, it has suffered greatly from economic decline, which has resulted in many of the buildings being neglected and a huge amount of work will need to be done. We need to retain the character of the area but find new and sustainable uses to secure the future of those buildings."

Earlier this week St Modwen Developments announced that it had bought canalside mills Healey Royd and Finsley Gate. It plans to turn the 7.5 acre site into a leisure, housing and employment complex.