A church has denied it has given up its controversial plans to turn one of Crystal Palace's largest entertainment venues in to a place of worship, despite sensational revelations to the contrary from its former planning agent.

Bhavash Vashi, the agent that represented Kingsway International Christian Centre (KICC) when its plans for the former bingo hall in Church Road were rejected by Bromley Council in December, has revealed the church told him it would not be appealing the decision.

The news has buoyed the thousands of campaigners who want to see the building turned in to a cinema, and believe the church may now be willing to sell it. They say they have the funds for a community buy-out of the £1.25m venue.

Mr Vashi said this week the church did not believe it had "a strong case" to challenge the council's decision to reject the application to change the bingo hall's use, and would now seek to use it as an "occasional concert venue".

But KICC has denied it has made its decision on the building's fate. A spokesman said it "was still considering its options."

The church has until mid June to state whether it will be making an appeal when its six month deadline for a decision expires.

Mr Vashi said: "The church told me a month or two ago they do not want to appeal. It wants to work with the community to find a solution everyone is happy with."

He said KICC was not confident it could win an appeal.

He added: "It wants to hold on to the property at the moment and use it for a limited number of events, including as an occasional concert venue."

The revelation the church may not appeal has been welcomed by cinema campaigners who have led a fierce battle to keep the venue's D2 community use.

Annabelle Sidney, who has led the Picture Palace campign, said she welcomed any indication that KICC would be willing to keep the community use, and she hoped it would rent out or sell the building.

She said: "We would be keen to work with the church on further development plans. We still believe that a cinema would bring the best cultural and economic regeneration to the area."

Thousands of residents have campaigned for a year to see the building turned in to an independent cinema after their devastation when the church outbid independent cinema chain City Screen, owners of the Ritzy and Clapham Picture House, to purchase the building last May.

Their high profile campaign has seen celebrity backing by Hollywood director Spike Jonze, pop princess Pixie Lott, and Mercury Award winner Speech Debelle.

Some 6,000 people joined the cause via Facebook and 18,000 objections were sent to Bromley Council from local residents and traders. A public meeting attracted about 1,000 people to the Queens Hotel.