An award-winning charity which helps elderly people continue to live in their own homes faces a struggle for survival after being refused funding.

The charity Homeshare was invited to Brighton and Hove by the city council two years ago but has now been told it is not a priority for continued cash support.

The council gave the group £27,000 to fund it it through the first two years but refused a bid to keep funding it at the same level.

Homeshare is among a clutch of charities and community and voluntary groups which have been refused funding from the council's main grants programme.

Joint co-ordinator Susan Goodwin said: "We are seriously having to explore joining another organisation in order to survive."

Homeshare helps elderly people live at home by finding young people who might otherwise be homeless to live with them.

There is an increasing shortage of residential accommodation for the elderly in the city, coupled with a lack of affordable homes for the young.

The organisation, which has two other branches, in London and Oxford, was named Charity of the Year in this year's Guardian awards for voluntary and community groups.

Ms Goodwin said: "We certainly will be able to keep the service going in the short term. In the longer term we will need to secure funding in order to survive.

"There is a lack of joined-up thinking between one part of the council, the culture and regeneration committee, and social services, which is the department which sought our services in the first place."

The decision to stop funding Homeshare jeopardises its future just as it begins to see the results of its first two years' work.

The charity was told it met the council's criteria for a voluntary sector grant but it was not a high priority.

Don Turner, councillor responsible for regeneration, the department which administers grants, said he would not discuss the details of the decision because they were confidential.