It was announced yesterday that a third-time lucky bid for funds for the landmark project in Newlyn had been conditionally approved.
But the offer met with a lukewarm response in the port as industry bosses refused to back it while vital questions of finances remained unresolved.
Meanwhile, it is unclear whether the port's biggest fleet, and potentially the new market's most lucrative customer, will follow through with a boycott threat issued amid cost fears.
Paul Trebilcock, chief executive of the Newlyn-based Cornish Fish Producers Organisation, was unimpressed with the funding offer.
He said: "We have been clear that we want to see improvements to Newlyn harbour, but there are still too many question marks with this project.
"We need to know how it will be funded and what the financial exposure to fishermen will be.
"A lot of things have to be resolved before we can support this."
Newlyn Fish Market is in dire need of modernisation and the Harbour Commission, the trust which controls it, has long nurtured ambitious renovation plans. However, two previous bids to secure vital funding from the Government have failed.
The rejections were fuelled by fears over a weak business case, worries expressed by the fishermen who would use it and concerns over the governance of the harbour.
In order to pocket the £2.3 million on the table, Newlyn Harbour Commission would have to stump up match-funding of up to £2 million.
The European Regional Development Fund will be financing the rest of the £7 million project.
However, the Western Morning News disclosed last year that Newlyn's Harbour Commission's lost almost £182,000 in 2008.
The previous financial year, spending outstripped income by £207,000.
Fears over the viability of the fish market plans last year prompted Newlyn's biggest fleet to say it would not do business with the new operator.
W Stevenson and Sons said it believed any borrowing undertaken by the Harbour Commission to meet its part of the bargain would inevitably be passed on to harbour users.
There was no-one available from the company yesterday.
Newlyn Harbour Commission itself is also in a delicate state of transition.
Applications for a new board have just opened and appointees, decided by the Department of Transport, are unlikely to take their seats before Easter.
In a statement, the Marine and Fisheries Agency confirmed that the grant from the European Fisheries Fund (EFF), which it chairs in England, had been conditionally approved.
The money is being offered "subject to assurances from the new Newlyn Harbour Commissioners," said the statement.
"The new Harbour Commissioners will need to provide assurances that they are content with the project, particularly the match-funding required.
"Two previous Newlyn applications had been rejected due to problems with the industry's views, the match-funding of the project, and the governance of the harbour.
"Sufficient progress has been made to allow a provisional grant offer to be made," it said.
The EFF has also approved £79,000 grant for improving electronic auction facilities at Plymouth fish market.
Despite the vote of confidence, some fishermen in Newlyn are unlikely to follow suit, vital if the port's decline is to be reversed.
David Stephens jnr is one of the dozen or so skippers who land their fish at Newlyn but take them up to Plymouth for sale.
He said a new fish market at Newlyn would not tempt him back.
"All my buyers are at Plymouth – they expect me to be there as well."
Mr Stephens jnr is one of the growing number of people in the industry to call for a central fish market for Cornwall, modelled on successful regional facilities in France and Spain.
"If we are going to make this step, let's at least make it a step forward and if we are going to spend this public money, let's spend it on the right fish market in the right place.
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