AN OUTLET for the Tate gallery in the Lake District is to compete against a monumental sculpture that will greet passengers on the ferry from Ireland for the award of multi-million-pound lottery grants.

The art venue would transform a ruined castle in Cumbria with a 1,500-seat amphitheatre and an underground gallery featuring exhibitions from the Tate collection and the Victoria & Albert (V&A) museum.

Meanwhile the sculpture, consisting of three 270ft-high granite pillars, is planned as a welcome for passengers on ferries arriving from Ireland at the port of Holyhead on Anglesey.

A total of 29 projects are competing for the £140m of available lottery funds in the Living Landmarks programme. It marks a return to the lottery’s earlier support for multi-million-pound landmarks – a policy that was abandoned after widespread criticism of expensive “white elephants” such as the Millennium Dome and the failed Earth Centre in Doncaster, South Yorkshire.

“We have learnt from the experiences of others in funding major capital projects,” said Anna Southall, who chairs the committee at the Big Lottery fund overseeing Living Landmarks. “We want to fund projects that have a long-term future.”

Six other schemes, including a plan to replant large parts of Sherwood forest, near Nottingham, have been entered for an ITV1 television contest in which viewers will vote for the winner of the biggest single Living Landmarks grant, worth £50m.

Winners of the grants will be decided over the summer and announced in the autumn.

In addition to Sherwood forest other entrants for the televised “People’s millions” awards include the Sustrans network of cycle lanes; a new desert-themed biome at the Eden Project in Cornwall; and projects in the West Midlands, Somerset and Swindon, Wiltshire.

The other awards, ranging from £10m to £25m will be decided by the Big Lottery, one of the “good causes” that hands out funds from its share of lottery ticket sales.

The castle project is one of the most eye-catching. It will house exhibitions on people and landscapes and will be centred on the ruins of Lowther Castle on the eastern fringes of the Lake District.

The Tate, headed by Sir Nicholas Serota, and the V&A are considering sending exhibitions there but do not intend to take ownership or control of it. It has been likened to Tate St Ives in Cornwall and given the working name Tate Rural by the Northwest Regional Development Agency.

The castle was designed by Sir Robert Smirke, architect of the British Museum and demolished by the 7th Earl of Lonsdale. His son Jim Lowther believes that building a cultural centre could save the remains from collapse.

“The obvious idea of turning it into a hotel or golf course just didn’t appeal,” said Lowther. “Instead we want to use the castle and landscape as the basis for a cultural attraction which is lacking for visitors to Cumbria.”

The plan for granite menhirs in the harbour of Holyhead is part of a £17m scheme for nine sculptures around the borders of Wales.

Other parts of the plan for “gateway” sculptures, backed by the Welsh assembly, include a 250ft fabric “postcard” displaying a Welsh landscape that will span the A550 on the north Wales border.

Marks Barfield Architects, designers of the London Eye, have proposed a “red cloud” of 300 flying human figures on 70ft poles next to the Severn bridge to represent the “collectivism” of Welsh society.

The gateways will only be built if they win a grant and Geoff Wood, project manager at Landmark Wales, which is organising the bid, said they were essential to Welsh “cultural independence”.

However, critics believe the plan is an embarrassment and a waste of money. “The only artist with ideas like this is the kind you meet in the pub at closing time,” said David Davies, Conservative MP for Monmouthshire, where the “red cloud” would be built.

“This idea is so completely bizarre people will wonder what on earth we are spending our money on. Is this how millions of pounds will be spent when people are dying of cancer because of cash shortages?”

The lottery’s ‘living landmarks’

Jim Lowther, son of the 7th Earl of Lonsdale, is bidding to save his ruined ancestral home

- An outdoor amphitheatre seating 1,500 will host music, dance and theatre in summer

- The basement art gallery will be lit by skylights cut into the ground Exhibitions on theme of ‘people and landscapes’ will be shown in biggest gallery space in northern England

- A glass viewing platform in the ruins will offer views across 3,800 acres of parkland

Gateways to Wales

- Three granite menhirs rising 270ft are planned for the waters of Holyhead harbour in Anglesey

- A red cloud of 300 flying figures may greet visitors crossing the Severn Sherwood forest may be replanted around a new museum

Other bidders

The Titanic’s shipyard in Belfast could become a tourist attraction

The Eden Project extension would focus on climate change

Blackpool wants lightshows and viewing platforms

Black country plans new parks and restored waterways

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