The Heritage Lottery Fund signalled its determination to focus on collections, rather than buildings, in its latest major grants round, announced at the end of July.

Two museums received a total of £20m: the Ashmolean in Oxford got £15m and the Darwin Centre at the Natural History Museum received a further £5m, on top of the £15.5m it has already received from the lottery. But the high-profile Daniel Libeskind Spiral, planned by the V&A, received a final thumbs-down, seven years after it was first mooted, in 1997.

Carole Souter, the director of the Heritage Lottery Fund, said that the Ashmolean scheme was 'really wide-ranging and innovative, designed to open up access to the collections in all sorts of new and different ways'.

The plan is to pull down the building at the back of the museum, built in 1900 under the keepership of Arthur Evans, and replace it with a new structure by US architect Rick Mather. The new building will be used to redisplay the museum's extensive archaeological collections.

Meanwhile, the Darwin Centre phase II will see a second building created next to the phase I wing in London's South Kensington, this time to house the museum's vast entomology and botany collections.

'We're talking about one of the world's greatest collections: this project will mean 80 per cent of it is accessible,' Souter said. 'It also means the collection can be properly conserved and stored.'

Richard Toy, the acting project director, said the new, CF Møller-designed building will hold more than 30 million specimens and will be able to cope with 2,500 visitors a day, 20 times the number that the Darwin Centre, phase I, daily guided tours can handle.

Carole Souter indicated that it was the emphasis on collection care and display of both the Ashmolean and Natural History Museum projects that secured the backing of the Heritage Lottery Fund trustees, who only give out grants above £5m twice a year.

She said that although the trustees recognised that the Spiral was a 'ground-breaking' building, they felt that the building itself was the dominant part of the project. 'The structure is so much at the heart of the project, we didn't feel that it gave us enough in terms of display, access and conservation of collections,' she said.

The V&A's senior management reacted with dismay to the decision. In a statement they said: 'Britain excels in the field of contemporary design and badly needs a centre to showcase our creative talents. It is a great shame to lose the chance to provide this platform and give London an outstanding new building.'

Nonetheless, the museum will apply again shortly to the HLF, this time for its proposed new Medieval and Renaissance galleries.

In another controversial move, the HLF also turned down a £10m application for a National Ship Model Collection Centre at Chatham Historic Dockyard.

This proposal aimed to bring together the stored ship model collections of the Imperial War Museum, National Maritime Museum and Science Museum, and save a scheduled, Grade II building on the Chatham side. Souter suggested that the project, while focusing on collections care, would not necessarily lead to increased visitors.

But Richard Holdsworth, the museum and heritage director at Chatham Historic Dockyard, said the aim of the project was two-fold: first to solve the storage problems of the three nationals involved, and second, to find a use for the historic Smithery building.

'The three nationals hold 4,000 model ships, which get seen by no more than 500 people a year,' Holdsworth said. 'This project was designed to provide efficient storage, while making the collections accessible to the 130,000 people who visit Chatham.

Our research says that each of our main galleries and ships are visited by 70 per cent of visitors so we anticipated that the ship model collection would be visited by more than 100,000 people a year - many more than at present.'

The HLF indicated that it may be willing to continue discussions with the trust: Holdsworth said that no decisions would be made until a meeting of all partners had taken place in late August