PRIVATE investors are in talks over the future of a troubled railway, The Northern Echo understands.

Under a deal being put together by Weardale Railway administrators Pricewaterhouse Coopers (PWC), a company already successfully running an established tourist railway in the South of England could take a financial stake in the project in return for shares.

An executive from the company has visited Stanhope Station, County Durham, this week and could be a key player in finalising a rescue package for the line.

PWC is seeking a new company to run the railway with volunteer support from the Weardale Railway Trust and an announcement could come as soon as tomorrow.

With crucial days ahead for the railway, major funders could contribute loans totalling £360,000 if they consider that it has a viable future.

Creditors have been told there is £250,000 to be divided up, giving them 25p in the pound.

But there is no formal offer on the table and some said last night they may hold out for more.

Professional, legal and administration costs would account for £100,000, including £20,000 from Government Office North East.

One NorthEast and the County Durham Development Company, owned by Durham County Council, have provisionally agreed to offer the money in the form of unsecured loans.

But Wear Valley District Council leader Olive Brown denied last night that her authority had struck a deal.

She said: "Government Office North East, Durham County Council and ourselves are in discussion about financial support for the railway.

"They have committed funds so far, we have not.

"We are exploring funding support options, in particular external ones, as we are very keen to support any enterprise that will save or generate jobs in our district."

One NorthEast said: "Public sector partners are considering options put forward by the administrators to decide the future of the Weardale Railway.

"No option has been agreed at this stage, but we will continue to work towards the best possible conclusion for both the railway and the creditors."

Durham County Council leader Ken Manton said: "The railway is a golden thread that links all we are trying to achieve in terms of Wear-dale's economic development over the next two decades.

"If we hadn't supported the railway, there was a danger that the company would have gone into liquidation. The timing was crucial.

"It means that creditors are going to get significantly more than they would have got if we hadn't intervened."

The railway ran successfully from July until December when it went into administration with the loss of 30 jobs.

Bosses were criticised for being naive in wasting money on overstaffing and unrealistic development plans.

The Heritage Lottery Fund refused to release £990,000 in funding and Government Office North East withheld £900,000 because of areas of concern uncovered during monitoring.