When you get turned down for a £300,000 Heritage Lottery bid you can either give up or do what the team at the Criterion Theatre in Blue Town on the Isle of Sheppey is doing.

Volunteers led by Jenny Hurkett and her husband Ian have scaled down plans to return the historic building to its former glory by doing the work themselves.

Jenny said: “I suppose you can call it Sheppey’s own DIY SOS.”

This year is the 150th anniversary of when the Criterion Hotel and Music Hall was built and 101 years since it was bombed by the Germans during a First World War raid on nearby Sheerness Dockyard.

Jenny and Ian wanted the heritage cash to rebuild the front of the premises and to add a third floor to store 10,000 Island archives. But the money went to the rival Sheerness Dockyard Church project instead.

Disappointed, but determined to carry on, Ian hatched a cunning plan to lower the ground-floor ceiling by six inches to create enough space to squeeze in an extra floor.

Work began on the 1,500 sq ft extension on January 8. Ian has already installed a new staircase and is rebuilding the box office downstairs.

Museum-quality archives, a costume store for the theatre and rooms for meetings, research and offices will fill the new first floor after a giant loading crane girder is removed. Downstairs will boast a bigger tea room and dedicated heritage area explaining the history of Blue Town.

The couple hope to complete work by June 5 to commemorate the building’s bombing with a concert by Mike D’Abo of 1960s band Manfred Mann.

Despite the work going on, they are still running Friday film shows and Saturday night entertainment. The new season of popular music halls now starts on March 13.

The new plans have slashed the price to £34,000 but the timber alone has cost £5,000. Funds have come from donations, grants from Swale councillors, quizzes, pig races and help in kind from businesses and a team of 30 volunteers including inmates from Standford Hill Open Prison.

Shoppers at Tesco's Sheerness store are helping by a adding their blue tokens to the project at the supermarkets' charity check-out.

The store's cash boost will replace sliding doors at the front of the theatre with double-glazed windows and a modern entrance.

Jenny said: "We would really appreciate support to help preserved some of the Island's heritage."

She also praised everyone who is already helping. There are weekly updates on the theatre's Facebook page.

The Hurketts bought the rundown premises in 2004 and converted them into a kitchen showroom.

But when Ian fell ill, they had to sell the business and moved into a flat at the top of the building.

Jenny said: "I thought it would be ideal for looking after Ian, renting out some space and starting a little heritage centre. But it's just grown."

Meanwhile, Ian, 71, is back at the heart of the operation as project manager.

He joked: "This is not what I had in mind for retirement. I'm thinking of getting myself another job for a rest!"