A SIGNIFICANT number of arts companies seeking long-term funding from Creative Scotland will be disappointed by an "extremely challenging" funding review, the body has warned.

Creative Scotland has £90 million to spend on "regular funding" but has received 264 applications for a total of £212m.

It must now decide which companies will receive new three-year deals.

Creative Scotland funds cultural organisations from all genres of the arts, including theatre, dance, galleries, visual art, festivals, music and film.

The body will inform ­ companies of their fate on October 29.

More than 40 arts groups currently receive another type of long-term finance, known as Foundation funding. These include well-known organis_ations such as Citizen's Theatre, Dundee Rep and Edinburgh ­International Book Festival, while other companies receive annual and programme-based funding.

Representatives at Creative Scotland admit that a number of companies will lose out on funding deals, but hope the amount of high-quality applications will help the body bid for more financial support from the Scottish Govern- ment and other sources in the future.

Janet Archer, chief executive of Creative Scotland, said: "The standard of applications for Regular Funding has been extremely high and the quality of thinking, scale of ambition and the creative potential that these demonstrate, impressive.

"This makes the task of assessment and ultimate decision-making extremely challenging, a challenge that is further amplified by the fact we have received 264 applications with a total value of just over £212m over the three-year period, compared to a plan-ned budget for the three-year period of £90m."

l A house and garden said to have inspired the Peter Pan story will be restored and turned into Scotland's first centre for children's literature after £690,000 in funds were secured from Creative Scotland.Famous author JM Barrie spent time at Moat Brae House in Dumfries and garden while attending Dumfries Academy in the late-1800s and he once described the property as "the genesis" of Peter Pan.