Construction of a new venue on the site of the former EMD cinema In Walthamstow will cost £5 million more than expected.

The forecast cost has risen from £17 million to £22 million after asbestos and damage was discovered inside the abandoned building.

Waltham Forest council approved a total budget of £25 million for the new project on Thursday (January 16).

It is hoped that, once the 1,000-capacity venue launches in late 2021, it will stimulate £34 million to £52 million in growth to the local economy over the next decade.

Council leader Cllr Clare Coghill said the new venue “will be a major asset, not just for Waltham Forest, but for London and the country because of its heritage and its status”.

However, she also noted that it was “a site of contention” a decade ago and that it remained an “incredibly difficult, important and sensitive location”.

An original budget of £19,950,000 was agreed in January 2019 but an examination of the inside of the building, only possible in spring last year, found water damage and pigeon infestation in the auditorium, asbestos throughout the building, internal leaks and corrosion to concealed steelwork.

A report presented to the council’s cabinet noted that some identified risks “are yet to materialise” and the level of repairs needed for a “90-year-old semi-disused historic building” are unknown.

A contingency allowance of £2,893,000 has been set aside in case of other possible risks, such as party wall and boundary issues, discovery of further asbestos and the impact of Brexit.

The former cinema, which closed in 2003, was most recently owned by pub company Antic, which ran it as a pub called Mirth, Marvel and Maud and sold it to the council in May last year.

Previous plans to turn it into a church met with significant opposition from the local community and then-owners Universal Church of the Kingdom of God sold to Antic in 2014 after failing repeatedly to obtain planning permission.

The council is still waiting for the outcome of grant applications to the Greater London Authority and the National Heritage Lottery Fund, which could reduce the expense of the project.