LYME Regis is set to be brewing its own beer by Christmas in an ancient town building after a group of residents put up the cash to save it from the hands of developers.

The old Malthouse generating station in Mill Lane is undergoing thousands of pounds of renovation work and will include a microbrewery.

The project will reunite the Malthouse with the Town Mill, also providing performance and exhibition space for the community.

The Town Mill Brewery is hoping to have its first test beers made by the end of the year and eventually sell bottled beers to local shops and cask beer to local licensed premises.

Julian Shaw, managing director of Lyme Bay Brewing Ltd, said: “The plan is for the equipment to be installed before the end of the year and we are certainly aiming to do the first test brews either at the end of this year or the beginning of next year.

“The really important thing is to open for the tourist season and we are certainly going to be ready for that.”

The brewery project has been made possible by a small group of investors who were worried the 16th Century building might be ‘lost’ to the town unless put to good use.

At the beginning of the year the Town Mill Trust attempted to buy the Malthouse from owners Western Power Distribution and was given until April to come up with the £150,000 needed.

The trust applied for funding from the South West Regional Development Agency (Swerda) but feared the grant would not come through when the agency pulled £4 million funding from projects in West Dorset and East Devon.

Lyme Regis residents Richard and Val Doney and a number of other investors from Lyme and the surrounding area stepped in to help save the building.

Mr Doney said: “The mill was having difficulty in getting Swerda to agree the money, so asked if there were any people in Lyme prepared to loan the money to allow the mill to buy the Malthouse.

“A few of us got together because we didn’t want the Malthouse falling into the hands of a developer – we wanted to save it for the town.”

Government agency Swerda agreed to a £200,000 grant in March and the mill trustees met the deadline to buy the Malthouse.

“When it became clear the mill wouldn’t need our money to buy the Malthouse we were asked if we would be interested in putting our money into a microbrewery,” said Mr Doney.

The investors were introduced to Mr Shaw, a chemical engineer, and agreed to back the microbrewery.

Mr Shaw said: “It requires tens of thousands of pounds to fund a microbrewery, and if you do it on a shoestring you are not going to succeed.”

The brewery bosses will lease the old battery room from the Town Mill Trust and employ a manager to do the brewing, initially producing one beer and naming it something significant to Lyme.

The Town Mill has welcomed the addition of a microbrewery to help complete the Mill Yard Complex. Mill manager Amanda Edwards said: “The Town Mill management are delighted that the Town Mill Brewery will be operating from the Malthouse and wish the proprietors every success with their venture.

“We are very pleased that the Malthouse is being restored and will be available for recreational and educational amenities for the people of Lyme and visitors alike.

“The addition of the brewery to the mill complex will create another interesting experience for those looking for something different.”