Seven years ago The Leach Pottery in St Ives, Cornwall, was "crumbling before our eyes", said its director, Julia Twomlow, and on the verge of being sold off for housing.

Now it is one of 11 contenders shortlisted for the £100,000 Art Fund Prize.

The small site was established by studio potter Bernard Leach in 1920, who worked there until his death in 1979, perfecting a popular discipline that has its roots in the Arts & Crafts movement.

Mrs Twomlow said: "During that time people from all over the world came here.

"It was the home of handmade studio pottery and became the Mecca for that art form."

But the small site fell into disrepair following the death of his third wife in the 1990s, she said.

It was only thanks to a campaign led by the Craft Potters Association and Sir Christopher Frayling, former chairman of the Arts Council, that it was saved.

Now a £1.7 million restoration has been completed, turning it into a gallery and working studio.

Mrs Twomlow thought the judges of the Art Fund Prize, chaired this year by broadcaster Kirsty Young, liked that it was not just a museum.

"We are not trying to recreate what was done in the past. We are originating new work in a heritage site."

Other contenders include Oxford University's Ashmolean Museum, which reopened last autumn after a £60 million facelift; Hampton Court Palace, for its programme of events and displays marking the 500th anniversary of Henry VIII's accession to the throne; and the Natural History Museum, for its new Darwin Centre.

The winner will be announced on June 30.