The Charity Commission has urged caution over community fundraising efforts after a two-year battle between locals and a charity over funds donated to buy Blencathra.

Donors to the Friends of Blencathra charity, which hoped to buy the Cumbrian mountain from the eighth earl of Lonsdale, have until April 2 to reclaim their money after it was taken off the market.

The project descended into angry recriminations amid concerns that donors would not be repaid after the mountain was withdrawn from sale in 2016.

The Earl had put it on the market in 2014 with a guide price of £1.75m to help pay a £9m inheritance tax bill. 

But it was removed from sale in September 2016 after the charity failed to raise enough money to buy it.

An opposition group, “Friends of Blencathra please say no” was established on Facebook and donors lobbied the charity for their money back.

A refund process for £240,173 in donations began early last year after it was announced that the bid had failed, and the final claims period will end next month.

The charity has repaid £166,426 to donors and another £21,013 has been released by supporters to be used by other, similar causes.

Another £52,734 belongs to donors who could not be found or identified. Donations which are not reclaimed will be given to five conservation charities including Keswick Mountain Rescue Team, Mountain Heritage Trust and Friends of the Lake District.

Refunds have been deducted £6 to reflect the cost of admin.

Dave Wheeler, chair of Friends of Blencathra, said some of the outstanding donations were over £1,000, with the largest being around £2,500.

He said he was “fairly disappointed” that the bid had failed. “We got the pledges and offers of enough money to purchase it at market value and also to have a fairly good fund to set it up for five years of maintenance,” he told the Daily Telegraph.

Coastal towns often face higher levels of inequality, lower wages and higher unemployment than other parts of the UK. The top five areas voting to leave the EU were all coastal communities in Essex, East Anglia and Lincolnshire. Dumfries and Galloway, on the west coast of Scotland, voted to remain but only by a slim margin.

In Portpatrick, a local seaside village, tiers of pastel houses stretch down to a small harbour where boats are moored. The place is so picture-postcard pretty, it’s hard to imagine that the harbour was almost left to rot – and with it, the future of the village – until local residents raised enough money a year ago to buy it.

Calum Currie contacted Community Shares Scotland (CSS) – a scheme funded by the Big Lottery Fund Scotland and Carnegie UK Trust. He hoped Portpatrick Trust might be eligible to become Scotland’s first community benefits society, which would allow it to sell shares in the harbour to secure it into community ownership.

Since 2009, more than 100,000 people have invested £120m of share capital into 400 community businesses across the UK. Dozens more schemes are in the pipeline, funding everything from local pubs to huge renewable energy schemes. Hastings, a deprived coastal town in south-east England, recently used shares to help give residents a stake in its restored historic pier.