CREDITORS who are owed almost £1m have granted a troubled railway breathing space to get back on track.

The decision to allow administrators to continue efforts to come up with a plan to save Weardale Railway from liquidation was made at a formal meeting of creditors in Newcastle yesterday.

Accountants PricewaterhouseCooper (PWC) faced 90 minutes of intense questioning, which led to a unanimous vote to let the administrators "continue to explore the possibility of a voluntary arrangement to safeguard the future of the railway".

It was agreed that a committee of five creditors will be formed to work towards a voluntary agreement.

Last night, The Weardale Railway Trust, which has been working independently of Weardale Railways Limited, to try to save the tourist line, greeted the decision as "good news in principle".

Acting chairman Kevin Hilary said: "We welcome the unanimous vote by the creditors to give us what we regard as an important breathing space to ensure the future of the railway.

"We are extremely grateful for this and will continue to work closely with them, the administrators and various stakeholders to try to safeguard the future of the Weardale Railway. There is much work to be done and lessons to be learned, but we regard this as a positive step and one we can build on."

Councillor Brian Walker, Durham County Council cabinet member for business support, said: " We share in the administrators' ambition to try to retain the company as a going concern and, as a creditor ourselves, we will try to be flexible in reaching an agreement that enables such a conclusion to be reached."

Regional development agency One NorthEast said it was continuing to work with PWC to seek the best solution for all parties and will examine all the options to solve Weardale Railway's problems.

John Hamilton, chairman of Weardale Task Force, said: "Without knowing all the details, the outcome of the meeting sounds positive and would indicate there is a way through the current problems."