An Oxford advice centre which shut last summer after 25 years has been refused a city council grant to relaunch the service.

The Oxford Claimants Union Advice Centre warned that the most needy and vulnerable people in Oxford will suffer after the council turned down its application for a £23,000 rescue bid grant.

The service, previously called the Oxford Unemployed Workers and Claimants Union, based at East Oxford Community Centre, in Princes Street, folded last June when Lottery support was withdrawn amid concerns the organisation was not entitled to receive Community Fund grants.

Centre volunteers asked the city council's east area committee to release a £23,000 grant earmarked in the council's 2003 to 2004 budget, to help relaunch the centre with one part-time advice worker and a team of volunteers.

However, council officers, concerned about the viability of the organisation, advised against releasing the grant and the committee voted by four to two to refuse funding.

Bill MacKeith, the chairman of the advice centre management committee, said: "We're extremely disappointed in the officers' negative report. There's going to be no advice service for people in east Oxford. Claimants are among the most needy people in the country."

In 2001-2002, more than 700 people obtained advice on benefits for disabled, homeless, sick, retired and single mothers. Last August, a homeless man staged a rooftop protest at the centre for several hours over its closure.

Bill Baker, chairman of the east area committee, it was against council policy to be the only body supporting an organisation.