Two ex-servicemen's clubs, who use the building, fear they could find themselves homeless should the site on Denmark Street be redeveloped for residential use, as reported in last week's Diss Express.

The Grasmere premises were given to the association in the 1960s by the Mann family and ex-servicemen's organisations had always been allowed to use the facilities free-of-charge.

The building is used as constituency offices by the association and South Norfolk MP Richard Bacon, while the ground floor is leased to the Grasmere Club on a 21-year lease, which expires in December 2009. Rooms are also used by other organisations, including local Conservative branches, the Royal British Legion and RAFA.

Association treasurer Jon Herbert said he had no idea where rumours the site was to be redeveloped into 27 flats had come from and denied the association had drawn up any plans.

"It's absolutely rubbish," said Mr Herbert.

He said the building had been built on top of old hospital foundations but little money had been put into its maintenance because the association did not raise enough funds to do so.

"We have a building that is effectively falling down because it has not been invested in," he said.

As the Grasmere Club's lease was also coming to an end, Mr Norman said the association had decided to undertake a complete fundamental review, "as any sensible organisation would do".

"All options are open, from retention and improvements to redevelopment or selling the site," said Mr Herbert.

The Grasmere Club and MP have been told about the review and valuers had been to look at the building.

A statement issued by the association said: "During this review process, SNCA is keeping both the Grasmere Club and Richard Bacon informed of the progress. No decision has been made and no options put forward to the SNCA for their consideration."