A Welsh mentoring and advice service for military veterans has been saved from closure by a Libor funding announced in the budget, despite applying unsuccessfully for other Libor funding.

The Change Step service, based in Colwyn Bay, Conwy county, had raised fears that it could close after an application to the Armed Forces Community Covenant fund was unsuccessful.

The Armed Forces Community Covenant fund was made permanent in 2015 to deliver £10m per annum to armed forces charities and causes. Money from this fund was announced as part of wider Libor funding.

In a statement Change Step’s director Geraint Jones had said that its “application to the Armed Forces Community Covenant for the continuation of Change Step in Wales was unsuccessful”.

He said that “feedback was positive, but I guess they had a lot of requests to juggle”.

Jones added: “The decision will inevitably mean some significant changes to the way in which Change Step is delivered, but we are determined to carry on one way or another.

“We are urgently talking to partners and stakeholders to see what can be done, and I am already overwhelmed with the goodwill and determination of everyone to pull together.”

Jones had told the BBC that 29 workers could lose their jobs if it was forced to close.

However, the charity were then awarded £500,000 of Libor funding, which was announced in last week’s Budget. In a further statement, Jones described the funding as “unexpected”.

Jones said: “The announcement from London today was unexpected, and can only have arisen through the good offices of friends capable of bringing such influence to bear. To the government, and to those who have lobbied on our behalf, we are immensely grateful.

“We will now ensure that this investment is used wisely and in the interests of the long term sustainability of the programme.”

The programme had previously been awarded just under £1m worth of Libor funds in 2013.

Although not itself a charity, the programme is led by CAIS and run by Drug and Alcohol Charities Wales.

A Treasury spokesman said that the Change Step scheme was a "worthy cause to support" but did not recieve funding through the Covenant Fund because the proportion of the funding it needed was too large for the size of the fund. As a result it recieved Libor funding in the Budget announcements.

Editor's note: The story has been updated after publication to include a statement from the Treasury.