A GROUP of volunteers hoping to redevelop an old railway station has received a £250,000 loan to ease cash flow problems.

North Yorkshire County Council has lent the money to Richmondshire Building Preservation Trust.

The trust has launched a £2.3m project to restore Richmond railway station building.

The aim is to open a business, community and leisure centre inside the Victorian-listed building.

Yorkshire Forward, the Heritage Lottery Fund and the European Union have already pledged funding of more than £1.7m.

But the trust needs money now to get the project under way and secure the grants.

Carl Les, the county council's executive member for corporate services, said: "This is a very ambitious project by the trust which will bring enormous benefit to the people of Richmond.

"The county council is keen to see this development completed and is pleased to give it financial support."

The trust will not be charged interest on the loan.

Councillor Les added: "Lending money to projects like this gives communities the opportunity to develop to their full potential.

"If they did not get the money from us, they would be forced to go to a commercial lender."

Trust chairman Jim Jack said: "This is wonderful support from the county council."

The restored station building will include a cinema, exhibition space, restaurant, a training centre, conference rooms and offices.

Earlier this month, the trust announced about £115,000 had been collected towards the total in just three months.

Project organisers were also delighted to hear a grant of almost £700,000 was confirmed by the Heritage Lottery Fund.

The trust hopes the redeveloped station will open in summer 2007.