A grant of up to �250,000 to help develop a more detailed application has been secured after the project made the Big Lottery Fund's Living Landmark's shortlist.

The project will now compete with 22 other proposed UK schemes to win a share of funding between �10m and �25m.

In Elizabethan times, Prescot boasted the only documented free-standing indoor playhouse outside London, during the same period as William Shakespeare's theatrical career.

Research also suggests that Shakespeare himself lived and worked in the region and there are strong connections with the Stanleys at Knowsley Hall, now home of the Earl of Derby.

Now the council and the Northern Shakespeare Trust (NST) are being helped to investigate the possibility of creating a commemorative theatre to reflect this exciting time in the town's history.

The development grant will allow Knowsley Council, the NST and other key stakeholders including Liverpool John Moores University, to create a business plan, carry out further consultation and develop the bid further before putting in a fully-worked up application for funding next May.

Councillor Eddie Connor, Knowsley Council's Cabinet Member for Leisure, Community and Culture, said: "To be able to bring a playhouse centre to Prescot would make a very significant contribution to the regeneration of the area and to regional tourism.

"We'll be developing our proposal further in partnership with the key stakeholders, ready to submit our application in May 2007. We are one step closer to seeing a playhouse in historic Prescot once again."