SWANAGE Railway is poised to look into increasing regular passenger services to the main line at Wareham, following funding from the Department for Transport.
The Government has previously allocated £500 million towards accessing the feasibility of reopening closed lines and stations.
Ten schemes were given development funding in May, with a further 15 announced on Wednesday in the National Infrastructure Strategy.
Projects to benefit from the latest round of funding include restoring services between Swanage and Wareham.
Swanage Railway Trust chairman Gavin Johns told the Daily Echo: "This is funding from the Department for Transport.
"It is coming to The Swanage Railway, it is going to allow us to carry out a feasibility study to increase the frequency of train services between Swanage and Wareham – to increase the number of days on which they could potentially operate."
Mr Johns says he is waiting for confirmation from the department about the amount of funding.
He said: "As soon as we have got that confirmed and we have agreed how we should approach it then we will start the piece of work to look at what the options are, what the costs are and what the benefits are."
The news of the funding comes as a welcome boost for the heritage railway.
Like many attractions in Dorset, it is fighting for survival amid lost revenue due to the pandemic.
Earlier this week the Echo reported how the company had been forced to make redundancies.
The summer of 2017 saw the Swanage Railway heritage line run a 60-day trial diesel train service from Swanage and Corfe Castle to the main line at Wareham.
But plans to resume regular passenger services hit the buffers because of a "protracted overhaul" of the diesel train it planned to use.
Work to restore the closed section of track - linking the Swanage Railway with the national network - began in 2014, with the first train running on it in April 2016.
Prior to that, the last train ran from Swanage to Corfe Castle and Wareham on the evening of Saturday, 1 January, 1972.
The summer of 1972 saw almost seven miles of track – from Swanage back to Corfe Castle and beyond to near Furzebrook – lifted.
Then a small party of volunteers, the fledgling Swanage Railway Society, started restoring the station buildings and tracks from 1976.
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