The water museum will cost nearly �600,000

The Elan Valley, near Rhayader, Powys, was flooded 102 years ago to provide the English city with water.

Community Arts Rhayader And District (Carad) had to match fund a Heritage Lottery Fund grant of �444,500.

Last month Birmingham City Council donated �20,000 to the project after initially refusing to help fund it.

The authority had previously said the museum would offer no benefits to the people of the city, but changed its mind following a meeting with a delegation from mid Wales.

We were confident of reaching our target Peter Cox, Carad

The final part of the funding has come from the Welsh Assembly Government in the shape of a �90,000 grant.

Peter Cox, Carad's chairman, said he never doubted that fund-raisers would achieve their year-long goal.

"We had a funding strategy and that was 17 pages long and we'd only gone through about 50% of them so we were confident of reaching our target," Mr Cox said.

"I was surprised by Birmingham City Council's initial error not to help us. They could not see the importance of it, but I wasn't surprised by the way people in Birmingham reacted."

'Vote of thanks'

Mr Cox said the Heritage Lottery Fund had already ring-fenced �444,500 for the museum project, but officials will meet on 21 September when they are expected to rubber-stamp the funding.

Once Carad has the heritage fund's grant, it will begin work with its architect to prepare for the building work to go out tender.

Carad said it had planning permission to covert one of its existing buildings into a museum in Rhayader.

Liz Pugh Carad's team director said: "We owe a massive vote of thanks to all the individuals, businesses and organisations who have helped our fundraising campaign."

The Elan Valley's six reservoirs send 360m gallons of water a day along a 70-mile pipeline to Birmingham, and also to parts of south Powys and south Wales.