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Conservation Minister Nick Smith yesterday announced a grant of $75,000 for the restoration of the historic Arrowtown Gaol, enabling the Wakatipu Heritage Trust to forge ahead with fundraising.
At the site of the gaol - the fourth oldest in New Zealand and the only surviving building of its type from the gold rush era - Dr Smith said it was important New Zealanders protected not only their natural heritage, but their historical heritage.
''For this truly gorgeous town that has an international reputation, it's buildings like this that make Arrowtown really special.
''If we don't get on and do some of the [work], we'll lose it for good.''
The building fell into disrepair in the 1950s until it and the land around it was declared a reserve in 1961.
However, the prison had continued to decline and now required urgent work on drainage, plastering, repointing, internal fabric repairs and possibly earthquake strengthening.
It was estimated the work would cost between $180,000 and $200,000.
The Community Conservation Partnership Fund was announced in March and will provide $26 million over the next four years to community organisations undertaking natural heritage and recreation projects.
It is particularly focused on supporting heritage projects.