Leicestershire County Council has scrapped a £3m application to the Heritage Lottery Fund (HLF) to enhance Snibston Discovery Museum, prompting concerns that it may be earmarked for closure.

A county council cabinet report confirmed that it would not submit a stage two bid to the HLF. It stated: “A bid, had it been approved, would have resulted in the county council being left with contingent liabilities of circa £4m that would have needed to be paid back to the HLF in certain circumstances.”

The council agreed last year to undertake a Libraries, Heritage and Arts Review, which aims to save £4.2m a year by 2015 and will look at the future of Snibston, as well as of Harborough and Charnwood museums.

“It is because of this review and the increased financial pressures facing the council that we cannot, at this stage, make decisions on investment plans,” said a spokeswoman.

Mark Taylor, director of the Museums Association, said the move suggested the museum could be at risk of closure in the future.

Carmarthenshire County Council has launched a consultation to cut spending on its museum service ahead of final budget decisions next month. John Marjoram, the development officer at the Federation of Museums and Art Galleries of Wales, said he was “very concerned” about the future of the county’s museums.

In Scotland, the University of Strathclyde confirmed that it would close the Collins Gallery in May. A spokesman for the university said: “We are taking appropriate measures to ensure the long-term care of collections.”