A £1.8 million complex for single homeless people is lying empty because there is no money to run it.

The new development at Castlecroft, near Bury's Castle leisure centre, was supposed to be a flagship scheme to help vulnerable people.

But the Government has cut a special grant to run it, and nine other projects, by 90 per cent from an expected £840,000 to just £84,000.

It means the Castlecroft building, which was due to open on May 11, cannot be used and it also threatens other proposed schemes such as the mother and baby unit in Radcliffe, and a supported accommodation project for disabled people in East Bury.

The irony is that the buildings themselves have, or were to be, erected with Government support, with money passed to housing associations such as Manchester Methodist HA, which is to run Castlecroft.

Town hall bosses are furious that the money to run these schemes, through a new tranche of Supporting People cash called Pipeline funding, has not been forthcoming. They say Bury has been placed in an impossible situation, unable to provide essential new services, while housing associations have wasted money on projects which cannot open.

Council leader John Byrne has formally protested to the Government and asked the borough's MPs for help. The result of the borough's appeal should be known soon.

Mr Mark Sanders, chief executive of Bury Council, said: "We are extremely disappointed that one part of the Government is not talking to another. That has disadvantaged vulnerable groups in Bury, the people most dependant on the support that the council and other agencies should be providing."

Ivan Lewis, MP for Bury South, said he had made representations and expected a decision within the next couple of weeks. "The current situation is clearly unacceptable and I hope that a sensible way forward can be found," he added.