Builder Bob McDonnell's offer on the �140,000 property was accepted, but then he was told the Minster bought it.

He then discovered the authorities planned to demolish it.

Cathedral officials have apologised but said a vital source of local limestone used for structural repairs lies underneath the building.

Bob McDonnell's offer on the full asking price for the property at Riseholme near Lincoln was accepted and he had planned to extend it then sell it on.

'Extreme situation'

He did not know the Cathedral also wanted it.

Mr McDonnell said not only had he been gazumped, he was about �1,000 out of pocket too, having spending spent the money on plans and a survey.

He has demanded the Cathedral reimburse him.

He said: "There's nothing I can do. At the end of the day they have got what they wanted at a cost.

"They're always wanting money but they seem to have plenty of it when it comes to getting what they want."

But Roy Bentham from the cathedral said everything was done legally and above board.

"All we did, in good faith, was to make an offer for a site that we desperately need to provide stone for Lincoln Cathedral but I'm sorry that he's lost out because of that and if it hadn't been for the extreme situation that we face, we certainly wouldn't have made this offer," he said.