Clitheroe has failed in a bid for funding to help transform its high street.
To the disappointment of traders in the town, it was confirmed this week that Clitheroe was not included in the 50 approved bidders for the Government's Future High Street Fund of £675m.
Kevin Horkin, the vice chairman of Clitheroe Town Action Group, said: "This is very bad news for Clitheroe particularly when Morecambe, Nelson, Chorley and Fleetwood have got their acts together and appear in the approved bidders list.
"I am aware the bid proposals did not go before any council committee or full council. It was written by officials of the council and no councillors who I have spoken to have seen or approved it.
"The Chamber of Trade, market traders, Civic Society and public have never seen it or been asked to comment. What was in the bid is a mystery - what proposals were turned down in our name without our consultation. This sadly is typical of the culture of secrecy fostered by some officers at the borough council.
"Clitheroe desperately needs a town centre plan which all local organisations and the public can sign up to and it needs to be got together quickly. CTAG will call a public meeting to consider the position and assist to graft a way forward."
Ken Hind, the former leader of Ribble Valley Borough Council, said he was shocked at what had happened and warned that doing nothing would lead to a slow decline of Clitheroe town centre.
He added: "No proposals were put before the Policy and Finance Committee or Economic Development Committee so councillors did not know what was is in proposals.
"Our MP Nigel Evans was not briefed on the bid. I spoke to him over the weekend and he has already spoken to the Government Minister responsible and been told that there will be a round of further bids in January for the Town Centre High Street Fund. This is a last chance for Clitheroe and we cannot afford to blow it .
"The first step is for the council to publish the proposals government rejected. Second, a quick widespread consultation needs to take place to put together a new proposal.
"This should lead to a competition among local architects to design a vibrant town centre plan. We need proposals that will bolster Clitheroe's position as the centre of one of Lancashire's major tourist attractions - the Ribble Valley where 3,500 people work in hospitality.
"To have an attractive vibrant town centre in Clitheroe, our main town, is essential to the future economic well being of the area and it should be given the highest priority by all.
"The one option we do not have is to do nothing. If no action is taken we will see a slow decline in the centre of Clitheroe, particularly around the market. The centre of gravity of the town centre will move to Holmes Mill and out of town shopping will damage our main retail shopping centre."