A question mark is hanging over a £40m library that was to form the centrepiece of Oxford University’s new Radcliffe Observatory Quarter.

The landmark library was planned to be the “symbolic heart” of the £200m scheme to redevelop the former Radcliffe Infirmary site.

The striking contemporary building, in the shape of a lantern, was to have been built in the second phase of the scheme.

But with the university undertaking a £78m transformation of the New Bodleian in Broad Street, it emerged that it had been unable to secure funding for a library at the heart of its new campus.

The plan was to create a vast underground library, with a two-storey glass and copper pavilion above as its centrepiece.

In the masterplan, the university said:“It would form a striking contemporary counterpoint to the Radcliffe Observatory itself. This is the symbolic heart of the scheme, a 24-hour beacon or lantern for a place of learning and a point of orientation for visitors and users alike.”

A new £70m maths institute, for 500 academics and support staff and 1,000 undergraduates, also in phase two, will open in September 2013.

But a university source said the future of the library was uncertain. He said: “It is still intended that some sort of building will go ahead, whether in present or altered form, but it’s not clear when this will happen.

“It’s no secret that this is a challenging time for arts funding and the building still requires funding before it can happen. But the humanities division’s success in securing large funding grants for teaching and research and a generous donation from Mrs Mica Ertegun for postgraduate study gives some cause for optimism.”

The university’s policy is to have 90 per cent of funding in place before major building work can begin.

University spokesman Matt Pickles said: “‘There is an ongoing conversation about the best arrangement for humanities and libraries on the Radcliffe Observatory Quarter which will ensure we reflect both the traditions of humanities in Oxford and the opportunities for humanities in the 21st century.”

The setback comes after an unbroken run of massive fundraising success.

Money from a Led Zeppelin reunion concert formed part of a recent £26m donation from Mrs Ertegun, the widow of the founder of Atlantic Records. The money will pay for the Mica and Ahmet Ertegun House for the Study of the Humanities, in St Giles.

The Russian-born philanthropist Leonard Blavatnik handed over £75m to create a new school of government to be built in the new quarter.

Meanwhile, Gillian Evans, a theology professor, told The Times newspaper standards were falling at the University’s Bodleian Library, with books being removed to remote storage and water bottles allowed next to early printed books, “often accompanied by chocolate brownies and even burgers and chips.”

In a joint statement Dr Sarah Thomas, Bodley’s Librarian, and Prof Ian Walmsley, university pro-vice-chancellor, said: “We do not allow food and drink anywhere near manuscripts; anyone who somehow managed to sneak a burger and chips into the Bodleian would be stopped by staff before they could remove the wrapper.”