A RESCUE package has been agreed that will allow a crisis-hit railway to finally re-open.

Weardale Railway was saved from liquidation after administrators PricewaterhouseCoopers announced a Company Voluntary Arrangement had been approved, following a creditors' meeting in Newcastle yesterday.

This paves the way for a new company to take over the running of the County Durham railway, which went into voluntary administration just over a year ago with debts of nearly £1m.

However, a spokesman for the London Ealing Community Transport (ECT) group, which has bought a 75 per cent stake in the line, warned that the trains would not be running by Easter.

ECT director John Hummel said that because the five-mile stretch of line between Wolsingham and Stanhope had been closed for so long, the Railway Inspectorate would have to examine it before trains could run.

But plans were firmly in place for the Weardale Railway to be up and running before the summer season.

ECT, which already runs the Dartmoor Railway, in Devon, will have three directors on the new company board. There will also be three from the Weardale Railway Trust, and one each from Durham county and Weardale district councils.

Stephen Sears, ECT chief executive, said: "The railway is a great facility for the community and will help spearhead tourism and regeneration of the area."

Only a handful of Weardale Railway Ltd's 104 creditors attended yesterday's meeting, at which they were told they would receive 25p in the £1.

Along with One NorthEast, the Government Office North East, Northern Rock Foundation and ECT, Wear Valley and Durham County councils have provided £260,000 for creditors from a total of £435,000 pledged to the project.

The railway has been described as "the golden thread" running through plans to regenerate the now-defunct Lafarge cement works site at Eastgate, creating new jobs and prosperity for Weardale.