More than 10,000 people have signed a petition demanding that a rare art deco lido is not destroyed.

Grange Lido, in the coastal Cumbrian town of Grange-over-Sands, is the only surviving seaside lido in the north of England. Built in 1932, the saltwater pool closed in 1993 but was Grade II listed by English Heritage in 2011, preventing its demolition.

Three years ago, South Lakeland district council, which owns the site, concluded that reopening the lido for swimming was unfeasible and began to explore using the site for other purposes.

It is planning a £2m “light touch” renovation which could see up to five new business units on site in the former ancillary buildings and changing rooms, alongside a landscaped open space in place of the old pool.

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But campaigners insist that with the current al fresco swimming boom, the pool could be commercially viable within three years. Some 74% of local residents want to be able to swim there again, they say.

Situated right on Grange-over-Sands Promenade, swimmers in the mushroom-shaped 50m pool would enjoy panoramic views of Morecambe Bay to one side and the Lakeland hills to the other.

Campaigners have put together ambitious plans which would include a cafe and restaurant, open all year round, with a 167 sq metre (1,800 sq ft) terrace looking directly over the lido and out to sea. They say there is also room for a spa and wellness facility, which will help with running costs of the summer pool operation.

“It’s a great idea,” said the local MP, Tim Farron. “But who is going to pay for it? The advice the council has had is that the capital costs of restoring the lido for swimming would be £8m-£10m, and they just don’t have that sort of money.”

Facebook Twitter Pinterest Grange Lido in its heyday. It closed in 1993. Photograph: Christopher Thomond/Guardian

He said there were no plans to fill in the pool with concrete, contrary to some claims. “I’ve triple- and quadruple-checked and it’s not true. What the council is going to do is create a sort of temporary decking over the pool so that it is safe and can be used for a stage, or perhaps a market, or cafes. If someone does put the money up to reopen the pool they can just take the decking up and it will be digger-ready.”

He noted that the campaign has begun to garner support from celebrities such as Red or Dead designer Wayne Hemingway and Olympic swimmer Keri-anne Payne. “What I’d say to them is: thanks for your support – now how about showing commitment with some cold, hard cash?”

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Farron said most residents agreed it would be wonderful for the lido to reopen as a pool, but many were sceptical of its commercial viability. In 2003, locals helped raise £3.3m for a brand new indoor pool, which despite winning a major design award, closed within three years because of serious design flaws. “It’s a case of once bitten, twice shy. But no one wants it there just rotting away,” he said.

South Lakeland district council said on its website: “Both visitors and residents continue to comment on the derelict state of the former lido, and we remain committed to ensuring a sustainable way forward for the future of the site, for the benefit of the community of Grange-over-Sands …

“Since consultation, we have had a number of interested parties and exciting proposals come forward with expressions of interest in the site.”

A number of lidos across the UK have been brought back to life in recent years, buoyed by the renaissance of open-water swimming. Last year, Saltdean lido near Brighton reopened after locals raised £3m, following in the wake of Jubilee Lido in Penzance.