THE world's oldest working railway celebrated a major expansion yesterday, then unveiled its plans for a museum.

A £120,000 engine shed was opened at Tanfield Railway, near Stanley, County Durham.

The Tyneside Locomotive Museum Trust, which owns the site, used the event to launch its bid to create a permanent museum.

Trust operations manager Alan Thompson said: "It has always been a dream of the trust to have a museum on the site.

"We have a lot of material in our homes that is becoming more and more valuable, but have nowhere secure to display it.

"It is still in the early planning stages and will cost hundreds of thousands, so it will rely heavily on external funding."

If it goes ahead, the museum will be built on the site of the former East Tanfield Colliery, which closed in 1965.

The main hall will showcase rolling stock and there will also be a history exhibition, public education room and a display of working machinery.

The railway, run by volunteers, offers Sunday steam train rides on a three-mile stretch of track that passes by the world's oldest surviving rail bridge, Causey Arch.

Behind the scenes, trust members restore engines and coaches.

The new shed gives the trust somewhere to display and store up to eight of the restored carriages.

Mr Thompson said: "Before, the coaches were stored outside, where they were open to the elements and vulnerable to vandals.

"They had to be repainted every couple of years. But now the paintwork should last four or five years."

The shed was opened to coincide with the 150th anniversary of the site's original Marley Hill engine shed, which is still in use.

The Heritage Lottery Fund gave £50,000 to the project and the Northern Rock Foundation gave £5,000.

Professor Richard Bailey, from the Lottery fund, said: "This is exactly the sort of project we want to encourage. It focuses on the industrial past of this area.

"The volunteers bring their enthusiasm and knowledge to the next generation, who have never known this area as what it was; one of the powerhouses of the North-East."

Overseeing the completion of the project was the final task for chairman Richard Charlton, who is stepping down, but will remain an active trust member.