The nine Liberal Democrat councillors at Gosport Borough Council would like to shut the museum to help meet a council budget deficit of between £300,000 and £400,000, and are calling on the eight Labour councillors and one independent to support them.

The 17 Conservative councillors want to keep the museum open. The Liberal Democrats are blaming the deficit on maladministration by the Conservatives, while the Conservatives are blaming Liberal Democrat proposals.

So far for the year 2006-07, the museum has cost £327,750 to run, and made £97,860 in income, running at a loss of £229,890. All agree that visitor figures at the museum - 17,187 from April to December 2006 - are not what they should be, but concerns have been expressed that closing the museum might lead to the Millennium Commission demanding a refund of the £40m grant it contributed to help fund the museum alongside other developments at Portsmouth harbour. This would bankrupt the council.

Bill Alexander, the former director of projects at the Millennium Commission, said that the commission would need to consider what the council is proposing before deciding what the implications for the site are.

Graham Burgess, a Conservative councillor, said: 'If we close the museum and take money from the council reserves, as the Liberal Democrats are proposing, then we will meet the deficit, but we will have no reserves and no museum. It is a brilliant museum and I believe that we have got to try to keep it open.'

Liberal Democrat councillor Peter Chegwyn said: 'Explosion is competing with HMS Victory, the Mary Rose, and the Submarine Museum in Portsmouth Harbour, but it is tucked away at the end of the peninsula and there is no public transport there. It is simply in the wrong place.'

Chegwyn advocates either closing the museum or mothballing it, with the collections put in storage, until a private developer can take it over. The council has received expressions of interest in the museum and the site from about 80 developers, he said, and would be talking with them all.

A decision on the museum's future will be made at a meeting on 7 February when the council finalises the budget.

Patrick Steel