Sutton Windmill, one of the tallest windmills in the UK, has sold to a private buyer dashing hopes of campaigners who were hoping to buy it to set up an academy.

Sutton Mill has been sold by online auction to a private buyer, bringing to an end hopes of campaigners who were trying to buy the historic building to create a mill academy.

The mill, which is the UK's tallest when it has its cap on, exchanged after it was bought by the highest bidder at online auction with Sowerbys. Members of the National Milling and Millwriting Academy posted a message on its website afterwards saying:

'It is with the deepest regret that the directors of the National Millwrighting Centre CIC announce that we have failed to secure Sutton Mill to become the base for the National Milling and Millwrighting Academy.

'Despite an overwhelming response to our pledge campaign from people nationally, but in particularly locally around Sutton, we were not able to secure the funds required to equal the bids made in the online auction for the site (the two lots – the bungalow and mill/granary).'

The Grade II star listed windmill and granary in 1.85 acres went up for sale last month. The mill was in need of renovation including the restoration of the cap estimated to cost alone in the region of £100,000. It went up for sale with starting bids of £135,000 together with a four bedroom bungalow in three acres for starting bids of £250,000.

Campaigners launched a major appeal to raise at least £150,000 to add to donations to create Sutton Windmill into an academy for the training of millwrights and millers. The windmill closed as a museum in 2008.

Yesterday Jonathan Wood, head of the Norwich branch of Sowerbys, confirmed that contracts had exchanged on the mill which sold for in excess of the guide price, with the bungalow selling for £305,000 following 10 bids. Mr Wood said: 'We at Sowerbys are delighted that Sutton Windmill has sold and that it will begin a new lease of life.'

Jonathan Cook, one of the directors of the campaign to buy it, said: 'We are extremely disappointed that we weren't able to raise enough for Sutton windmill and we will be reviewing other potential sites.'

The official statement posted on the campaign site said: 'The directors want to thank everyone who has dug deep to make pledges or donations to the project. We would also like to thank North Norfolk District Council and Sutton Parish Council for their unwavering support for the project, the Society for the Protection of Ancient Buildings (SPAB) and their Mills Section and our team of volunteers in Sutton and the surrounding villages who did everything within their power to engage the local community over recent months.

'We can genuinely say 'we put our all' into trying to make this project a reality.

'Any remaining funds left once the CIC's obligations have been met will be paid to the SPAB Mills Section in order that they can continue their work in setting up a Millwrighting Skills Programme.'