Key services would be slashed in order to fund the Otterpool Park new town unless more money comes from Whitehall, council bosses have told the government.

The warning from Shepway District Council (SDC) officers comes as they submitted a bid for £1.07m from the Department of Communities and Local Government (DCLG).

The bid document sent to the Homes and Communities Agency – part of the DCLG – warned of “potential impacts” to it delivering “current local authority services” if more cash is not awarded.

The Express can also reveal total costs in preparing the Otterpool Park project – before building even begins – are estimated at more than £6.5m. Almost £3.7m of that is set aside for land acquisition and £2.83m earmarked for designing the town and submitting a planning application.

The application for extra government cash said if the funding was not secured “delivery on site by 2020 would not be achievable”.

Papers also say that would “require the council to reduce resources deployed to other key services so as to create capacity” for Otterpool Park.

The report does not specify any particular services but indicates bosses would be willing to cut them so Otterpool Park – a 12,000- home garden town with schools, doctors and employment areas on the outskirts of the district near Westenhanger, Lympne and Sellindge – could go ahead.

The council expects to spend £2.2m in 2017/18 with £628,000 spent on planning costs and public engagement last year.

It is now looking to secure extra funding having already received £1.1m from the government last year but the council said money left over from last year’s grants is being carried over into 2017/18.

SDC owns 357 acres of the 1,000- acre site and is working with Folkestone Racecourse owners Cozumel Estates, which will put in £511,500 of the £2.2m costs this year, the papers show.

After former housing minister Gavin Barwell approved the expression of interest last year, £750,000 was given to the project. That was followed by a further £345,000 in March.

If the new grant funding applied is successful, it will bring the total funding received from the government to £2.1m.

Documents say: “Without financial support to date the council could not have continued at pace with its ambitious timeframe for delivering housing on site by 2020.

“Future funding of the project solely from the council’s own resources would significantly reduce the speed at which key masterplanning and associated technical work could be carried out and could place the project at risk of missing key deadlines and milestones.

“It would also require the council to reduce resources deployed to other key services so as to create capacity for this programme.”

The bid also warns that this would lead to a “loss of confidence by Cozumel in SDC as a partner and the local community in the council’s ability to deliver.”

Costs are still to be finalised for 2018/19 but the council has signalled to the government in the bid to DCLG that it may need a further £260,000 next year.