A PRIVATE railway line which has debts of almost £1m was placed in the hands of administrators yesterday.

The Weardale Railway, in County Durham, brought hope of new prosperity to the dale when it re-opened in the summer.

But the venture yesterday bowed to mounting financial pressures and handed over control to accountants PricewaterhouseCoopers.

Thirty of the line's 36 staff, including project manager Tony Greenup, were laid off immediately, with only depot workers kept on.

With development plans put on hold and huge debts, months of turmoil lie ahead for the line, which has carried 19,000 passengers since services between Stanhope and Wolsingham restarted in July.

The railway is a key element in a regeneration plan drawn up for the dale, and major funders have pledged to seek a way for it to continue.

The crisis came to light at the end of last year when backers Government Office North-East and the Heritage Lottery Fund withheld almost £2m because they were not satisfied with a business plan drawn up by Weardale Railways Limited, the company running the line.

Cash flow problems meant it could not afford to pay staff their full December wages, although funders came up with a package to pay them in time for Christmas.

Workers spoke of their bitterness last night, laying the blame on funders and a wasteful management.

One said: "They chucked away the money we did have on things that weren't necessary and took on staff we didn't need."

The Weardale Task Force, regional development agency One NorthEast, Durham County Council, Wear Valley District Council and Weardale MP Hilary Armstrong all spoke of their determination to help the railway succeed.

And the Weardale Railway Trust, which has supported the project since it started in the early 1990s, said last night: "We are intent on giving our full support to the railway.

"We are heartened that the administrators have stated their intention of examining all options to keep the project going."

John Holmes, One NorthEast's director of regeneration and tourism, said: "Today's decision means that PricewaterhouseCoopers will take stock of the current situation and the options for the company's future.

"We will continue to work with our funding partners in an effort to safeguard the railway scheme and as many jobs as possible.

"The determination is still there from all the partners for this project to succeed and we will work closely with the administrators in an effort to achieve the best possible outcome for the scheme and Weardale as a whole."

Weardale councillor John Shuttleworth said the railway needed to be more business-like.

He said: "I want it to succeed, but I don't want public money thrown away.

"Another priority is for creditors to be paid. A lot are local businesses who employ local people."

Weardale Task Force chairman John Hamilton added: "There is goodwill from all the funders for the railway to succeed.

"Tremendous efforts are being made to ensure that the railway has a successful future and, although there are risks, I am as confident as I can be that the current problems will be overcome.

"The railway remains a key plank in the regeneration of Weardale. It has proved that it can bring people in and help other businesses.

"People have been working at the very highest level to make it work.

"However there are financial considerations which must be taken into account and it must be run like a business which can generate revenue and be sustainable."

Ms Armstrong said: "I'm extremely disappointed by this news.

"However, I know that Government Office, One NorthEast and the other funding agencies are working hard to make sure that the railway has a sustainable future. I will do whatever I can to help out."