A firm which wants to transform Manningham Mills will spell out the reason for its funding problems to a House of Commons Select Committee.

It has been invited to attend and give evidence as MPs consider regional funding regimes.

Award-winning developer Urban Splash will blame major delays to its £18 million scheme on drastic changes in 'gap' funding where public money can be used to make up shortfalls.

The amendments, aimed at helping small businesses, mean that no major Bradford schemes with funding shortfalls can now be helped by Government regeneration body Yorkshire Forward.

Urban Splash will provide most of the funding for the redevelopment of the landmark South Mill, but the scheme needs a further £5 million which would have been available under the old funding rules.

The company hoped to start work last autumn but says it is held up while Yorkshire Forward tries to find a solution.

In the meantime the roof of the famous building has been stripped by vandals and it has been flooded and hit by fire raisers.

Bill Maynard, a director of Urban Splash, said the company had been invited to go to the Select Committee and would give evidence that it had been badly hit by the ending of gap funding. "The system is now working against us," he said.

A Yorkshire Forward spokesman said negotiations were continuing on funding for Manningham Mills and it hoped to make an announcement soon.

In the meantime a feasibility study - funded through the Council's neighbourhood renewal programme - is being undertaken covering the mill and its surrounding area.

Heather Hancock, a director of Yorkshire Forward, who appeared before the Urban Affairs committee last week, also told MPs that the Manningham Mills project could have been helped with gap funding under the old system.

Bradford Council's deputy leader Councillor Richard Wightman said the change in funding rules had prevented a number of vital schemes in the district from going ahead.

He said it had been stopped because of complications, including a European Community ruling, that it was an improper use of state money.

Coun Wightman added: "I think it is time the Government got its own house in order and was more forceful about this."

The Council's executive member for the economy, Councillor Simon Cooke, said: "The Government just did as it was told when it should have stood up to Europe.

Bradford West MP Marsha Singh said he was deeply concerned about the problems and delays the scheme was suffering and the exclusion of Bradford in the new system.

The mill will be converted into 370 apartments and penthouses, offices and business units if its planning application is supported by Stephen Byers, the Secretary of State for Transport, Local Government and the Regions.