Directors of a community hub for groups and organisations say the facility faces closure unless an essential grant is released by the town council.
Todmorden Community Resource Centre (TCRC) was launched in October 2012 and now offers more than 55 groups an affordable meeting space.
But directors believe that the service offered by the centre could be at risk if a grant to cover running costs is not paid.
Since May, directors Shirley Fielder and Mike Hall say they have ploughed around £7,000 of their own money into the centre to keep it open and may soon have to rely on donations to cover the cost of running the centre - approximately £1,200 per month.
Mr Hall said: “We need the council to say yes to the grant as that gives the green light to apply for other grants.
“I don’t think the councillors appreciate how close we are to closing - they should be thinking about what they are going to do if we are going to close.
“The bottom line is we’re just waiting for what excuse will be next, it really does feel like we’re just waiting for the next problem.
“We don’t charge anyone anything and we don’t turn groups away - more than 600 people a month are coming through the doors and we’re still growing in numbers. The centre is exceptionally good value for money and there is nothing else in the town like it.
“We have more than 55 groups who will have to find somewhere else to go and 20 per cent of those groups are likely to fold as they can’t afford to pay rent.
“Some work in quite sensitive areas and need anonymity - it’s an appropriate venue for different groups.”
TCRC originally applied for a grant of £3,000 to cover running costs and building rent in May - this sum was then reduced to £2,000 to cover running costs at a meeting of the Amenities Committee on August 20.
The TCRC is a registered Community Interest Company - a special type of company which cannot be used for the financial advantage or benefit of employees, directors or members of a single organisation.
Following the approval of the grant, concerns were raised over fears of a conflict of interest with regards to ownership and rental income, causing a delay in the payment of the grant.
At a meeting of the Amenities Committee on October 1, councillors Jayne Booth (Lab, Stansfield), Mo Brown (Lab, Cornholme), Mark Catterall (Lab, Langfield), Michael Hatfield (Lab, Cornholme), Margareta Holmstedt (Lib Dem, Stoodley), Frank McManus (Lab, Stoodley), Josef Rez (Lib Dem, Central) and David O’Neill (Independent, Langfield) voted in favour of a resolution to seek legal advice.
Mayor of Todmorden, councillor Michael Gill (Independent, Stansfield) voted against the resolution and councillor Diana Tremayne (Lab, Central) abstained.
But directors of the centre maintain the advice they received shows that the CIC operates within the law and in accordance with regulation.
Michael Hatfield (Lab, Cornholme), said: “I am not accusing anyone of wrong doing.
“However, as guardians of public money Councillors have a duty to ensure that Town Council grants are only paid to bona-fide organisations and are compliant with current legislation.
“Todmorden Town Council Amenities Committee, when discussing the grant application from TCRC, have raised concerns as to whether the situation is compliant with current legislation.
“As nobody on the Council is suitably qualified to make this assessment, the Amenities Committee correctly decided to seek legal advice on the matter.
The committee’s decision was subsequently ratified by the full Council meeting.”
Legal advice is currently being sought from the Yorkshire Local Council Association.