Derek Walcott at home in St Lucia. A museum celebrating the poet has closed after facing a funding shortfall. Photograph: Micheline Pelletier Decaux/Corbis via Getty Images

A museum on the site of the boyhood home of the poet and playwright Derek Walcott has closed amid a funding shortfall that has been linked to disputes over controversial tourist developments on St Lucia.

The Nobel laureate, who died in March, attended a ceremony last year to mark the opening of the museum, housed in a reconstruction of his former house in the Caribbean islands capital, Castries.

But the St Lucia National Trust has since shuttered the Walcott House, citing budget cuts.

The trust, along with some residents and environmentalists, has previously expressed concerns over a planned $2.6bn resort scheme masterminded by a Hong Kong-based horse racing magnate that is to be part funded by the sale of St Lucian citizenship to Asian investors.

It fears that a proposed causeway linking a nature reserve to the mainland would damage the shoreline and threaten endemic rare species. In March, the trust published an essay on its website entitled A Causeway for Concern.

The trust is also objecting to a planned dolphinarium at the Pigeon Island national park in the north of the island.

In April, the St Lucian government announced the removal of the trusts annual subsidy, which amounts to about $250,000 or about 20% of its yearly budget. This cut, the trust says, has forced it to shut the 700 sq ft Walcott House, which has running costs of about $80,000 per year.

The Walcott House was closed because of funding constraints, said Bishnu Tulsie, the trusts director, who called it a rather painful decision With the cut in our subvention we are finding it difficult to keep the home open.

The islands main opposition party, the leftwing Labour Party, issued a statement describing the governments decision as vicious, vindictive and reeking of victimisation.

The prime minister, Allen Chastanet, of the conservative United Workers Party, has denied that the grant was terminated in retaliation for the trusts stance on the dolphin park and the resort project, known as Pearl of the Caribbean.

I am not vexed with the trust, he told reporters. Right now, we have a cash problem in the government. We are not generating enough revenue to cover all the costs that we have. We have to prioritise where we are going to spend our money.

The trust has ambitious plans to expand the museum site into a major tourist attraction and arts centre, but these have been put on hold.

According to the trust, significant grants from the Taiwanese government to help fund future phases of the $6m project have not yet been passed on by the St Lucian government.

St Lucia is one of a small number of countries that have diplomatic relations with Taiwan rather than its neighbour and rival China. A spokeswoman for Chastanet did not respond to requests for comment.

Walcott was born on the island and died there on 17 March, aged 87.

He won the Nobel prize for literature in 1992 and was visiting professor of poetry at the University of Essex from 2010-2013. His twin brother, Roderick, a notable playwright and director, died in 2000.

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Derek Walcott museum closes amid row over Caribbean tourist developments - The Guardian