It is a serious setback for villagers in Thornton, near Bradford, many of whom wanted the property to become more firmly established on the literary tourist trail alongside the Brontë Parsonage Museum at Haworth.
Now Lottery funding is thought to be only hope of fulfilling the dream of turning the house into a museum.
The new Brontë Birthplace Trust said it would announce its next move after a meeting in Thornton tonight to discuss Bradford Council’s refusal to help.
Fears are growing that the house will end up being converted into a bistro rather than an anchor of a new tourism scheme, which Thornton residents see as key to the village’s regeneration.
The Birthplace Trust had made national headlines with its plea to Bradford Council to buy the large family home where the Brontës lived before they moved to Haworth.
Supporters of the idea have pointed out that the property could be snapped up for £130,000 – substantially less than Bradford Council forked out for the Tour de France.
But Councillor Andrew Thornton, executive member for environment, said yesterday: “We explored a number of ways in which we might offer assistance for the Brontë Birthplace Trust to make an offer for the property.
“However, as the council is not in a position to acquire the building for itself, we were not satisfied that this was a justifiable use of public money or a reasonable intervention for us to make in competition with any private individual seeking to purchase the property.
“Government cuts to the council’s budget together with a national and local contraction in public grant aid continues to put severe pressure on our existing cultural assets.
“Adding to those pressures with an open-ended commitment to an unquantified scheme cannot be justified.
“We will continue to offer support to the Brontë Birthplace Trust as they pursue external funding bids for their project.”
Trust chairman Steve Stanworth said: “We are of course extremely disappointed.
“Our initial thoughts are the council are not supporting a local community in its bid to claim its rightful place on the Brontë way.
“We now have to regroup and press on with our Heritage Lottery Fund bid.
“We still hold out lingering hopes someone will invest in the project.”
A monthly update meeting at the Blue Boar in Thornton this evening will determine the trust’s next move, he added.
But local councillor Valerie Binney, who had asked council bosses to buy the house, is already convinced that a huge opportunity has been missed.
She said: “I was extremely disappointed with the council’s response especially the Tourism and Cultural department who said they did not want the Brontë birthplace.
“We get lots of tourists from Japan and America and local walkers visiting Thornton to see the house on Market Street where the famous sisters were born and to visit the Old Bell Chapel where Patrick Brontë preached.
“Patrick said that the five years he spent in Thornton were some of the happiest of his life.”
Mr Stanworth is also leader of the group that is restoring the Bell Chapel, which contains the font where Patrick baptised his children.
Coun Binney added: “It is very shortsighted of the council when the Government has just announced a fund for keeping our history alive.
“We could have offered a Brontë visitor package tour beginning with the birthplace and the Bell Chapel then up to the Parsonage at Haworth – not just for coach parties but for walkers on the Brontë Way.
“There are a lot of disappointed Thornton residents and associates about this.”
The property was home to the Brontë sisters and their brother Branwell, between 1815 and 1820.
It was bought in the late 1990s by the writer Barbara Whitehead who, with local help, opened the property as a museum. It attracted visitors from across the world.
Ms Whitehead sold the house in 2007 and it was converted into flats. It recently had an asking price of around £130,000.