A former theatre in Shepton Mallet could be given a new lease of life as part of a multi-million-pound boost from central government.

The Amulet Theatre was built in 1975 as a "state-of-the-art" venue, but closed in 2002 and is currently listed as "at risk" by the Theatres Trust.

Shepton Mallet residents have been campaigning to save the building and reopen it as a working theatre, seeking grant funding from the government and voluntary organisations to bring the project to life.

The Department for Levelling Up, Housing and Communities (DLUHC) announced in early-March that £5m of capital funding would be provided to cultural projects within the former Mendip area, which includes Shepton Mallet.

Shepton Mallet Town Council has now formally asked Somerset Council to use this funding on the Amulet, to help create "an enterprising, flourishing and fairer Somerset".

The theatre was gifted to Shepton Mallet by the local Babycham brewing family, and was built in the brutalist architecture style of the time, with a unique retractable seating system.

Under the regeneration plans put forward by the Let's Buy the Amulet community benefit society (CBS), the venue will be significantly refurbished, with both floors being used to stage events and host community groups.

The 270-seat auditorium on the first floor will host theatre, cinema and live music, while the ground floor will include a cafe, offices and meeting rooms.

The regeneration will provide a base for two annual festivals, as well as a venue which local community productions can use.

Matt Harrison, who chairs Shepton Mallet Town Council, addressed the issue when Somerset Council held a full council meeting in Bridgwater on Tuesday afternoon (April 23).

Speaking via Microsoft Teams, he said: "There is an opportunity which for Shepton Mallet could be completely transformational.

"The government's recently announced culture projects levelling up fund has come at a critical juncture. One of our town centre's landlords is looking to divest their property portfolio, which includes the former Amulet theatre.

"The building, which is not in a good physical state, dominates our town centre and casts a physical and metaphorical shadow over our town. Envisaged to provide the town as a cultural venue, it has remained mostly empty for a decade and is now decaying.

Shepton Mallet has no theatre, no cinema, no leisure centre, no tourist information centre and no banks – it doesn't even have a town hall. We have a budding arts scene but that relies on a sporadic mix of spaces across town – think disused shops and registry offices."

The town council and CBS were preparing a bid to the community ownership fund when the levelling up grant was announced – a grant which would allow a much more in-depth refurbishment than previously anticipated.

Mr Harrison continued: "his new funding round could enable the facility to open from day one and positively impact the whole town. Frome has the Cheese and Grain, Wells has a theatre and a cinema, Street has the Strode Theatre and a cinema, and Glastonbury has the town deal.

"I understand the Mendip towns are understandably vying for this money, but what matters here is the biggest impact on the most culturally under-served conurbation in the Mendips – Shepton Mallet.

"I would therefore ask you to consider the Amulet bid to help deliver an enterprising, flourishing and fairer Somerset."

Councillor Federica Smith-Roberts, portfolio holder for communities, housing and culture, said the council was in the process of putting together a list of projects where the £5m could be used – a list which had to be submitted to DLUHC within a matter of weeks.

She said: "I had a really good meeting last week where we were talking about the theatre. It is a really interesting and exciting time in relation to the capital funding we've received of £5m to spend on cultural projects in Mendip.

"We have a process in place to deliver a potential list of projects which could benefit from this funding. We will continue to keep up to date with you."

Any regeneration work carried out using the £5m will have to be confined to the former Mendip area – meaning it could not be used on other cultural projects in Somerset, such as the stalled regeneration of the Octagon Theatre in Yeovil.