Harbour commissioners in Newlyn have three months to raise £2.3m to ensure a new fish market can be built.
The European Fisheries Fund has agreed a £2.3m grant for Newlyn Fish Market together with a £970,000 grant from the European Regional Development Fund.
But Newlyn will only receive the grants if the rest of the money for the £5m venture can be found by Newlyn Harbour Commissioners.
The commissioners must have proof that the money can be raised by 20 August.
It is proposed that the funds would be raised from landing and selling dues.
Commissioner, and Newlyn harbour master, Andrew Munson said: "The whole industry wants good facilities, but it has to be paid for and to pay for it has to come from the cod end of the fishing.
"It's no good crippling an industry to put something up that won't be of any use of because they won't be able to afford to use it."
The plans for the fish market include the building of a new market hall, auction room and meeting area.
Fishing fleet owner Elizabeth Stevenson said: "Newlyn definitely needs new improvements, but what it mustn't do is saddle itself with debt that the catching sector and the merchants will not be able to fund."