The age of the public railway began in May 1822 when the first piece of track was laid along a 21-mile route between Stockton and Darlington.

It was another three years before Locomotion Number One hauled 26 wagons and a coach into history, when 650 intrepid travellers climbed aboard in Shildon, County Durham, the home of pioneering engineer Timothy Hackworth.

Yards from the spot where the epic journey started, the National Railway Museum (NRM), in York, is linking with an enterprising North-East council to create its first branch - housing its reserve collection of "at-risk" engines and carriages.

When it opens in 2004, the display of 60 restored and part-restored vehicles could bring 50,000 visitors to Shildon, restoring prosperity unknown since its British Rail Wagon Works shut down in 1984.

The project will get its biggest boost yet, this morning, when the Heritage Lottery Fund confirms a £4.9m grant towards the £7.7m centre, which is being built by the National Museum of Science and Industry and managed by Sedgefield Borough Council.

The spin-off benefits will be enormous for businesses in Shildon and the surrounding area.

Eight jobs will be created, and there will be work experience placements for GNVQ students and opportunities for rail enthusiasts to volunteer their skills.

All the exhibits are from the NRM's reserve collection and are currently stored in sheds and warehouses around the country.

They could include vehicles as ordinary as coal trucks and as grand as royal carriages. One is likely to be a controversial prototype of the first "tilting train", which never went into service.

Volunteers in York are busy restoring British Railway's 1972 Advanced Passenger Train (APT) in preparation for its move to Shildon.

The APT became a notorious symbol of British Rail's failure to get to grips with the problems of an ageing network. It's tilting mechanism was supposed to help it corner faster on the existing track - thereby alleviating the need for costly new lines.

Instead, all it did was make passengers nauseous and send cups of hot coffee slopping across the aisle.

There could be a return to the region for NER (North-Eastern Railway) Snowplough No 12, dating from 1891, built by the North Eastern Railway and originally based at the Percy Main depot, near North Shields.

One of only three wooden snowploughs preserved, it was restored by NRM staff in the museum's own workshops and is currently on display in the Great Hall, at York.

NER Steam Breakdown Crane No DE331153 was one of three bought by the NER from Craven Brothers, in Manchester, in 1907, and is now back in York after a ten-year loan with the North York Moors Railway, in Pickering.

An outline planning application for the 6,000 sq m building, which will house them next to the Timothy Hackworth Museum, is being submitted within weeks and work could start later this year.

A £350,000 grant from the Department of Culture, Media and Sport and £219,000 from the Shildon Single Regeneration Budget (SRB) programme were announced at the end of last year.

The Lottery grant opens the way for bids for more funding from sources, including One North-East and the European Regional Development Fund.

Sedgefield council leader and SRB chairman, Councillor Brian Stephens, said: "This is great news not only for the people of Shildon but for Sedgefield borough and the region. The town of Shildon is synonymous with the railway industry and I hope many people will come to visit the museum when it opens."