RAILWAY bosses in the final stage of reopening an historic North-East line are anxiously watching developments at a troubled steelworks.

At present, the Weardale Railway Company occupies the old gun barrel shed at the steel plant in Wolsingham, County Durham, under "a gentleman's agreement".

But if attempts to find a buyer for the 140-year-old steelworks fail, then administrators will start winding up the steelmaker - which could mean the sale of the 30-acre site.

Weardale Steel went into administration seven weeks after being taken over by Midlands-based Eastwood Industries.

Fifty-four workers lost their jobs and another 29 have been kept on to complete orders for Holland and Germany.

Eastwood had bought the company from the Dorset-based Langham group of companies for just £1.

Any sale of the site could prove a serious setback to Weardale Railway's plans to reopen the Bishop Auckland to Stanhope railway line, last used by a passenger train in 1953.

"At present, we lease the old gun barrel shed from Langham's under a gentleman's agreement," said Weardale Railway's managing director Brian Morris.

"We are obviously anxious about that arrangement after what has happened at the steelworks in the past few weeks."

The railway company, which earlier this year was awarded a licence by the Department of Transport to operate services on the line, uses the Grade II listed gun barrel shed as an "operational headquarters" in Weardale. It also has offices at the Stanhope railway station.

Mr Morris and other railway company directors hope to have a meeting soon with Langham's chairman, John Langham, to agree a long-term lease for the gun barrel shed, where they store engines to be used on the reopened line and other rolling stock.

"If that fails to come off, then we will have to consider buying the shed with the help of any grants that may be available."

Mr Morris said the company was in the final stages of buying the Weardale line from Network Rail, which recently took over from Railtrack.

The aim was to complete the sale by next spring and run a train service in the summer.

The reopening of the railway is regarded by the task force, led by development agency One NorthEast, as one of the landmark projects in the regeneration of Weardale following the closure of the Blue Circle cement works at Eastgate, which cost 147 jobs.

It is hoped it will not only help to open up tourism in the dale, but it will provide a regular business and passenger service.

Read more about the Working For A Future campaign here.