Scores of local investors who supported the Barge Inn Community Project have lost every penny, project chairman John Brewin confirmed.
The Honeystreet pub has been handed back to its owner Ian McIvor, a Surrey-based entrepreneur.
It’s understood Mr McIvor will appoint new managers and that it will eventually re-open.
More than £400,000 Lottery funding was poured into the acquisition of the lease and refurbishment of the building by the community project group headed by Mr Brewin, who was a director of the former WigglyBus village bus service.
The Gazette can reveal that as well as the Lottery Village SOS funding, the Barge Inn Community Project set up a loan bond scheme where people could either make donations or invest in bonds for a minimum £20 to help float the pub buyout scheme.
Mr Brewin said that 44 people invested in the scheme, raising £2,400 which, like the lottery money, was swallowed up in the refurbishment and in running costs after the pub re-opened in a blaze of publicity.
Mr Brewin confirmed this week that all those who had backed the project with their own money either as donation or through the purchase of bonds had lost every penny and that the repayments, promised for next month when the project was launched, will not be happening.
Application forms distributed to people wanting to support the community pub start-up stated: “The minimum investment is £20 and this will be seen as an unsecured fixed- term interest-free loan repayable in December 2012.”
The forms said donations would not be repaid and added: “Bonds will be repayable at the end of the term (unless there are exceptional circumstances).”
Mr Brewin said the bond scheme “never really took off” and attracted a total investment of about £2,400 from 44 people including a couple from Norway who invested £500 in bonds.
The project chairman said: “All that money was absorbed into the overall project so there will be no repayment. “We felt that the staff and small suppliers deserved paying first.”
Apprentice chef Emily Wood, 18, of Milton Lilbourne, has been offered a job by at least four pub-restaurants since losing her job at the Barge.