The Grimsby West relief road remains a high priority despite failing to win Government backing, local authorities say.
A £50m bid for Levelling Up Funding had been submitted for the 2.5-mile road and other major infrastructure projects.
But the scheme was not amongst the first round of applicants which were announced in this week’s Budget.
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North East Lincolnshire Council leader Philip Jackson said he was ‘extremely disappointed’ by the result and will spend time reviewing the bid and listening to Government feedback.
The next chance to apply will be in spring 2022, but the council will look into other funding options in the meantime.
The original bid requested £36m for the link road, and additional funds for a new bus bridge near the Europarc, improving roundabouts into Grimsby, essential maintenance on flyovers and extending the cycle superhighway scheme.
The relief road between the A46 and the A180 would potentially unlock land for 3,500 houses across four new villages, whilst also easing congestion and emissions in Grimsby.
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But it has proved controversial with environmental campaigners, who have protested the plans outside the town hall.
Councillor Jackson said the council would explore other funding options for the road.
“Our bid and the reasons why this investment was so badly needed, were well set out and properly identified and for that reason of course we are extremely disappointed,” he said.
“For us to grow as a borough, and meet our identified housing delivery targets, we need to see schemes of this nature, which will provide a balance of new developments and the protection and enhancement of our green areas.
“We remain confident that the Grimsby West scheme would achieve this ambition and the expected growth we need to achieve as a borough.
“We will therefore continue to look at alternative funding options for the future. It is also important for everyone to understand the benefits that such a scheme would deliver for the whole of North East Lincolnshire - both economically, socially and environmentally.
“Finally, I would like to thank everyone who has given their views on this scheme since the LUF bid was submitted earlier this year. As with any such plan, we must listen to all views and take them into account as we move forward, which we will continue to do.”
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Chancellor Rishi Sunak awarded £1.7bn of Levelling Up funding to councils across the country in Wednesday’s Budget. 94 bids were accepted out of around 300 which were received.
Local authorities will now receive feedback on their submissions, with the next window for applications opening in the spring.