A £7M museum development, which could attract thousands of visitors to the North-East, has been placed in jeopardy by young vandals.

Shildon in County Durham is pinning its hopes for future prosperity on attracting the first offshoot of York's National Railway Museum.

The annexe is expected to pull in 40,000 visitors a year to the area, bringing massive spin-off benefits.

But all this has been plunged into doubt after exasperated community leaders threatened to pull the plug on the project in the face of continued vandalism.

The latest wrecking spree was discovered yesterday in Shildon's town square, which is dedicated to rail pioneer Timothy Hackworth.

Yobs shattered bus shelter windows, threw stone slabs into the Hackworth Fountain and smashed lamp posts with iron bars.

Ironically, the Royal Town Planning Institute will today present a certificate of commendation to Shildon for its success in involving the community in its regeneration programme.

Councillor Bill Waters, lead member for regeneration with Sedgefield Borough Council, warned he was ready to pull investment out of Shildon's most ambitious project to date.

"We will go so far as to pull the plug on the railway museum if the people of Shildon are not prepared to stand up and be counted," he said. "Tell us who these young louts are.

"We have spent £13m in Shildon and £3m in the town centre alone and I can't go on justifying it to councillors from other areas if the vandals do this."

Anyone with information should call police on (01325) 314401 or Crime-stoppers on 0800 555 111.