However, continues the IWA, in late 2007 BW announced that the funding position had been resolved following Stroud District Council’s agreement to take responsibility for works around Brimscombe Port and that BW would contribute matching funds to the financial package to restore the canals between Brimscombe Port and Stonehouse, which is also being supported by the Heritage Lottery Fund, regional and local authority funds and the voluntary waterway sector.

The IWA believes the BW decision is a short-sighted reaction and not fully thought through. The IWA statement says it understands BW’s tight financial position and the need to undertake unexpected remedial work on the Monmouthshire, Brecon & Abergavenny Canals, but the IWA believes that more should have been done to secure new funds for these canals from other sources rather than cannibalise a strategic restoration scheme that had momentum and secure funding .

The IWA says it's very concerned that BW’s surprise withdrawal will give excuses to other funding partners to pull out or reduce their commitments, but is urging others to retain confidence in the project whilst alternative funding solutions are found, even if slight scaling back of the project must be considered.

'The Cotswold Canals restoration is a vitally important project, and it is of over-riding importance that the project should not be put in jeopardy,' said John Fletcher, IWA national chairman. 'IWA understands the financial demands and the necessity of early repairs so that the Brecon & Abergavenny Canal can be reopened as soon as possible. We also sympathise with BW in the constraints that have been caused to it by a lower Grant-in-Aid settlement from Defra than it needs.'

However, he insisted, robbing the Cotswold Canals restoration to meet these obligations is strategically a bad decision, and for BW to break its promises at this stage reflects very badly on it.

'BW's actions are nothing less than a betrayal.'

The IWA is lobbying BW to reconsider its decision it is urgently working with the other partners to understand what action it is able to take to try and recover the situation.