According to the London South Bank University (LSBU), which wants to transform the crumbling 1846 Borough Road building into a student union and new primary care centre, the scheme has had to be put on ice because of an increase in costs of the college's larger 'stage one estates development' programme.
It is also understood that the money needed to realise the LDS project alone has jumped from £6 million (as reported in the AJ 09.11.06) to nearer £11 million, according to local press reports.
LDS won permission for the scheme - which will see the retention of two of the church's existing facades to form a new entrance area to a new-build four-storey centre behind - late last year, and was hoping to start on site this summer.
However, a statement released by the university confirmed that the project would not being going forward as previously planned.
A spokesman for the university said: 'Due to an overall increase in costs for stage one of the estates development programme, the chapel project will be delayed for the time being, until funding criteria have been met.
'The university will continue to pursue all opportunities to deliver the chapel project in its current form.v
The statement continues: 'In the mean time, the Princess Street group practice and the student's union, which are due to be rehoused within the chapel, will still operate in their existing locations.'
LDS founder Alex Lifschutz admitted he felt let down by the setback. He said: 'We are very disappointed at the delay to the project, but know that the university is putting a great deal of effort into securing the additional funding for this important building in the LSBU campus.'