THE full financial shambles that ended in the collapse of plans to celebrate the North-East's railway links this summer was revealed last night.

Rail 2000, the company behind the Millennium Cavalcade of Steam, owes £750,000 - and creditors will get nothing.

The company had hoped to attract thousands of visitors from all over the world to a huge steam jamboree aimed at marking the 175th anniversary of the Stockton and Darlington railway.

However, it went into liquidation earlier this month amid mounting speculation over the August event.

Among the amounts owed by Rail 2000 are thought to be:

l More than £500,000 to 200 trade creditors, which include coach and travel companies;

l Sponsorship of £100,000 provided by Tyneside's Federation Brewery;

l About £90,000 to a mystery backer;

l Loans totalling £50,000 from Darlington and Sedgefield Borough Councils.

Rail 2000 chairman David Champion, who has remained silent since the collapse of the steam celebration, yesterday faced tough questions from creditors over where the money had gone.

Although The Northern Echo was refused access to the meeting - held at Gosforth accountants Tait Walker, appointed to carry out the liquidation - it has received a copy of a Rail 2000 directors' report set out to creditors.

In it Mr Champion, who is understood not to be personally liable for any debts because of Rail 2000's position as a limited company, points an angry finger at both Darlington and Sedgefield councils.

The authorities are accused of undermining the Cavalcade of Steam by making secret approaches to other bodies about putting on an alternative event.

Both councils, who refused to invest further in the project as the financial position worsened, are also said to have insisted on an "immovable" deadline for a proposed £150,000 cash investment from an unnamed Scottish company which never came.

Liquidator Gordon Goldie said Rail 2000 had no assets and no money would be paid to creditors.

Refunds have begun to be paid to individuals who bought cavalcade tickets through agency Way Ahead as their money was held in a frozen account.

Mr Goldie said: "People want to know how the company has gone through the amount of money it has.

"It is my job now to investigate where the money has gone and report back to creditors in due course."

Tait Walker is also required to submit a report to the Department of Trade and Industry.

However, there was some good news for Rail 2000 last night. Railtrack, Virgin Trains and West Coast Railway Company agreed to drop any claim for costs over the "hundreds of hours of staff time and expertise, costing thousands of pounds" towards planning the event.

A Railtrack spokesman said: "It would be perfectly legitimate for us to recoup our costs, but we feel that we should waive that right as a goodwill gesture.