The museum that was bowed - but not broken - by the lottery

It was with unmistakable irony that a double rainbow materialised in the leaden Manchester skies when Daniel Libeskind's Imperial War Museum North was topped out on the banks of the city's ship canal two weeks ago.

It was with unmistakable irony that a double rainbow materialised in the leaden Manchester skies when Daniel Libeskind's Imperial War Museum North was topped out on the banks of the city's ship canal two weeks ago.

A ?20m pot of gold from the heritage lottery fund was to have helped fund the dramatically explosive contours of this new museum at Salford. But although Libeskind - who designed the Jewish Museum in Berlin and the so-called Spiral extension to the Victoria and Albert Museum in London - worked in anticipation of it, not a penny was forthcoming.

When the Imperial War Museum bid was initially rejected in December 1997, its supporters were told that heritage lottery funds had established enough major capital projects. Smaller, revenue-funded projects were flavour of the month.

The museum has since relied on some judicious cloth- cutting andbloody-mindedness to realise its regional ambitions. The withdrawal of the promised ?20m left it with just ?28m to play with, courtesy of Trafford council, the European regional development fund, English Partnerships and Peel Holdings. And the scale of the building had to be trimmed by 10 per cent.

Libeskind "wasn't precious about scaling down the project," said Vivienne Bennett, IWM North project director. "But he did say that beyond a certain point it could not be cut any more, in which case a new creation would be necessary."

Since the dynamism of the original creation had already captured the imagination of financial backers, that prospect was utterly unthinkable for IWM. Instead, a cherished auditorium went, the exhibitions budget was slashed and Libeskind's team settled for cheaper materials - metal, instead of concrete, now clads each of the three shards which form the building and which are based on the structure of a sphere shattered into fragments, to reflect conflict in earth, air and water.

The vertical air-shard forming the entrance comprises a lattice of steel 55m high with a 29m observatory platform offering views across Manchester. An earth-shard will house the large volume of exhibits, its floor is domed to give the visitors the impression that they "are standing on top of the world," says Libeskind. A concave water-shard accommodates restaurants and overlooks the canal.

"The reduced budget has, in some ways, helped," said Martin Ostermann, one of Libeskind's project architects. "The shards are more dominant and dramatic if you make them metal." The metallic elements also settle the museum in with its nominal twin - the shimmering, aluminium-clad ?96.4m Lottery-funded Lowry, which sits across the canal.

Libeskind said the building "will be there in a strong and stark form without any compromise to the original concept. I hope it will contribute to the debate about the impact of conflict, particularly the impact of 20th century conflicts".

But the IWM is, quite understandably, smarting. Lottery money has been thrown at a catalogue of ill-fated Lottery-funded museums, including the National Centre for Popular Music at Sheffield. A Lottery handout of ?3.5m has also brought 100 pieces of public art to the North-east - some of which have done nothing more than baffle the locals. A northern outpost for the IWM seems at least as worthy a recipient.

With just over half the anticipatedbudget, the IWM will make imaginative use of the resources available, relying on archive material currently in storage at the London's IWM; 120 million ft of cine film, for instance, will be projected onto Libeskind's 12m high walls. "We have nothing to thank the lottery fund for, but they have indirectly made us make use of every last square inch of the building," said Ms Bennett.

A ?3m fund-raising campaign, chaired by BBC war correspondent Kate Adie, is under way for the last of the project's costs - and such is the optimism that a second phase of development plans is on the table, including the auditorium which had to be ditched nearly two years ago. Libeskind has designed the infrastructure with the second phase in mind, said Ms Bennett. "It would give us great pleasure to fulfil those original ambitions."