Representatives of the monks have inspected the Victorian building and lodged a note of interest in buying it. But they face competition from other potential buyers, including developers interested in converting the building into a hotel or flats.

The Tibetans hope to form a new community in Edinburgh and make space available for exhibitions, talks and religious outreach events. The monks, who are followers of the Dalai Lama, pictured, say the church, which was built in 1871, would be the perfect location for their new cultural centre despite the fact the building would need to be completely gutted.

Planning permission is believed to be already in place to turn the building into a cultural centre and one of the city's leading architects has welcomed the plans as a way of preserving the building. Owners the Italian Consulate bought the church in 1992 but despite plans to turn it into an Italian Cultural Institute, the property has remained empty and fallen into disrepair.

The C-listed building has been on the Buildings at Risk register since 2001, where its condition is listed as poor and the threat to its future is rated as high.

The Italian consulate general said it was being put on the market for purely financial reasons.

Thom McCarthy, who owns two city centre shops, Golden and Crystal Clear, and runs the Buddhafield meditation space on Blackfriars Street, led the monks' representatives on a tour of the church yesterday.

Mr McCarthy said five other interested parties had attended the viewing, including some who wished to convert the building into a hotel or flats.

Mr McCarthy lived and worked for more than a decade at Samye Ling in Dumfriesshire, the first Tibetan Buddhist Centre outside Tibet or India.

He said the monks would need to launch a fundraising drive to buy the church, but that they would not be daunted by the task. He said: "This new place would be an official Karma Kagyu Tibetan Buddhist Centre. The idea is there'd be space for hire for exhibitions, public space for talks and a lot of interfaith events."

Mr McCarthy said he was consulting architect Malcolm Fraser, who worked on the Netherbow and the Scottish Poetry Library, about the refurbishments.

"It requires a tremendous amount of work inside, where there is rotting timber and there are a lot of dead pigeons but there would be little change outside.

"A lot depends on Edinburgh planners, but it already has planning permission for one cultural centre, so why not another?"

Malcolm Fraser said he was completely in sympathy with the monks' plans.

He said: "I hope to be advising them on the refurbishments. It's old and water has got in, but the Tibetan Buddhists would put the building to wonderful use. They would value it as a religious building for the whole community.

"Architecturally it's good when buildings aren't chopped up into small rooms and we would respect the integrity of what's there."

Arts impresario Richard Demarco said it would be a "tragedy" if the building were converted into luxury apartments or a bar.