The Royal College of Organists pulled out of establishing new headquarters at Curzon Street Station in Birmingham following a financial blunder of its own making, it was claimed last night.

RCO officials managed to raise the capital cost of refurbishing the prestige building, with the help of a £1.3 million grant from the city council, but failed to take account of an estimated £500,000 annual running costs which it would have been expected to pay itself.

The explanation was given by Councillor Ken Hardeman, cabinet member for regeneration, who has been blamed for failing to deliver the RCO relocation. The college's decision to pull out was seen by his critics as a major blow to the ongoing regeneration of Eastside.

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Coun Hardeman ( Con Brandwood) told a meeting of the full city council that the RCO realised it could not afford to move to Curzon Street Station because officials made no provision for the additional cost of wages, rent and rates.

The college had intended to build an extension onto Curzon Street, making the premises far larger and more expensive to run than its previous headquarters in London.

"They over-stretched themselves. They were too ambitious," Coun Hardeman added.

The council was now actively seeking alternative premises in Birmingham for the RCO, Coun Hardeman said.

He added: "We have a guarantee from them that they intend to remain in Birmingham long term."

The RCO will continue to operate from temporary offices in Millennium Point.

Coun Hardeman admitted he could give no guarantees about the multi-million pound refurbishment of Curzon Street Station.

A request for assistance is likely to be submitted to the Heritage Lottery Fund. The upgrade of the historic building was due to have started several months ago and be completed by the end of 2006.