Plans for a new €110 million cultural quarter on Dublin's Parnell Square have had to be cut back because of funding difficulties.
Dublin City Council had secured planning permission for the construction of a new central library along with cultural facilities such as a music centre, exhibition space, a 200-seat conference area and design space.
However consultants have reported it will be difficult to get funding particularly for a library development which has "a lower affinity score with private donors than the arts generally".
The city council says it will fund the new library but the other aspects of the project will have to be postponed.
In a letter to councillors, Dublin City Council Chief Executive Owen Keegan said this news was "most disappointing and unwelcome".
The project, which included the construction of a plaza on Parnell Square North, was originally costed at €60m but subsequent reports stated it almost doubled to €110m.
Now the cost of the library alone is being put at €80m.
The Parnell Square Foundation was set up by Dublin City Council and developer Kennedy Wilson to raise 55% of the funds through private philanthropy and 45% from borrowings by Dublin City Council.
To date a total of just €4.8m has been provided by Kennedy Wilson and a further €1.7m by Dublin City Council.
In his letter to councillors, Mr Keegan said the council is now proposing to develop the new library - involving a move from its current premises at the ILAC centre - and leave the rest of the project for a future date.
The whole scheme would have involved the redevelopment of eight Georgian Houses on Parnell Square North six of which used to house Coláiste Mhuire secondary school.
It was hoped that the development would complement existing cultural facilities on the square such as the Hugh Lane gallery, Poetry Ireland's building, Dublin Writer's Museum and the Gate Theatre.
A spokesperson for Kennedy Wilson said the company remains committed to the project in "multiple smaller phases" because of serious challenges in the construction industry.
The spokesperson added: "Separating public funding for the City Library and private philanthropic funding for the cultural facilities, ensures that the essential library element can be delivered much more quickly than if the entire project was delivered in a single phase."
