Plans to revamp Warrenpoint Baths could potentially rule out Lottery funding.
Crotlieve councillor Declan McAteer says although impressive, the project must involve restoration.
Current plans for the disused building involve a change of use.
The Heritage Lottery Fund says it's 'not in line with project objectives'.
Mr McAteer is urging Newry, Mourne and Down district council to revisit all the options.