FINAL funding has been given for an ambitious North-East museum projects to celebrate the region's golden railway heritage.

More than £7m is set to be poured into the creation of a North-East railway village dedicated to the pioneers of steam.

The development, which is expected to be a major tourist attraction, is to be built in Shildon, County Durham.

Officials confirmed last night that a £600,000 grant from regional development agency One NorthEast's Single Programme had been given the go-ahead.

And, in a double boost, it was also confirmed that the project has been given a further £500,000 from the European Regional Development Fund ERDF.

The cash boost completes a capital funding package of well over £7m and brings Shildon's dream of building its own Railway Village a step closer.

Construction work is now expected to get underway early in the New Year with the opening scheduled for 2004.

Previous grant funding has been obtained from the Heritage Lottery Fund, along with contributions from Sedgefield Borough Council and the Department for Culture, Media and Sport.

The project will incorporate the popular Timothy Hackworth Museum and will feature a 6,000 sq metre building capable of housing up to 60 vehicles from the National Railway Museum's reserve collection, a shop, education centre and conservation workshops. Entry to the Railway village will be free when it opens.

Councillor Terry Ward, Sedgefield Borough Council's lead member for Culture and Recreation said: "This is more wonderful news for the Shildon Railway Village.

"It is the final piece of the jigsaw and we can now look forward to the building work beginning and the railway industry once again becoming the focal point of Shildon.

Andrew Scott, head of the National Railway Museum, said: "The support of OneNorth East and the ERDF is absolutally crucial to this project and we are delighted to have their backing.

"With capital funding in place, we can now concentrate on developing the content of the new building and making sure that this will be a first class visitor attraction."