Scargill House, the Christian retreat set up almost 50 years ago, is to be closed with the loss of 20 jobs.

The 100-acre complex, near Kettlewell, will close from Monday July 20 and be sold.

The site includes the Grade Two listed chapel designed by award-winning architect George Pace and is expected to fetch a minimum of £2.5 million.

Also on the complex is a former converted shooting lodge, three houses and a number of flatlets as well as protected woodland. It can accommodate about 80 people.

It was set up shortly after the Second World War to provide spiritual solace for people across the Christian denominations. The site, understood to have cost about £40,000, was bought by subscription and donations.

The money raised from the sale will be pumped into setting up a new grant-giving foundation.

Trustee David Baker said the community had recently been running at a deficit.

He said: "It is with immense sadness that we have made this decision, but also with thankfulness at what we have achieved over the last 49 years or so and anticipation and excitement for the next 50 years."

Jobs will be lost, but it is hoped that some staff will be set on again once the foundation is established.

Mr Baker said: "Over the last five years we have been working with a different philosophy, exploring issues like cultural cohesion, working with refugees and bringing schoolchildren together to help them understand the different people around them.

"Now we want to work with people in their own communities instead of insisting they come out to us."

He said it was hoped to retain the sense of community without actually living together, but it would be necessary to negotiate a number of legal loopholes.

The site has been described as "stunning" and the chapel is particularly special because of its architectural standing.

But developers who expressed an interest would have to consider its Grade Two status and any building would have to be sympathetic to the surroundings.

District councillor for Upper Wharfedale, John Roberts, said he had canvassed villagers in Kettlewell for their reaction.

"They feel the closure will have quite an impact on local businesses - people resident there would come down to the pubs and the post office would have spin-off trade.

"Local people are saddened by the closure, at the loss of jobs - which are few and far between in this area - and they are apprehensive about the future.

"What people are fearful of is that the site might turn into another Linton Camp School situation because of the development constraints."

The school is derelict after several plans to re-use it failed.

Coun Roberts said: "It will call for an inspirational architectural design because the site is so beautiful."

He said he could see it used as a conference centre or country house hotel.

A spokesman for the Yorkshire Dales National Park said it would not be difficult to find a use for the site, especially with the number of residential units already present.

Officers would also be available to help any potential developer with advice and information about a planning application.