A RAIL GIANT could be set to breathe new life into the former Thrall wagonworks site in York, with the creation of up to 250 jobs.

Network Rail has already started storing some of its rail engineering fleet at the Holgate Road complex, and sources claim it is looking to base a huge maintenance operation there.

It is believed the company recently signed a 12-month deal to hire the site's lease from Thrall owners Trinity Rail, following months of delicate negotiations.

A senior source revealed its expansion plans - to carry out maintenance on rail support vehicles - will generate in the region of 250 jobs.

This would be the second time rail jobs have moved into the site since the closure of the York carriageworks in the 1990s, restoring it as a major centre for the industry.

The source said that the future outlook for the site had also been improved, because it was understood that the regional development agency, Yorkshire Forward, was likely to agree to let Network Rail use a five-acre piece of waste ground to restore a vital rail link across the former Thrall complex.

Holgate Rail Industries is to resubmit a planning application on behalf of Network Rail to install the rail link. It is believed about 40 people are employed by Network Rail at the former Thrall complex.

A spokeswoman for Network Rail said: "Network Rail has a commercial agreement with Trinity Rail Group for fleet stores management and distribution, which is currently operated out of the former Thrall site.

"During Trinity Rail Group's occupation of the site under this agreement, Network Rail will be making a full assessment of the viability of expanded use of the depot."

It is not known whether Network Rail would want to buy the site outright from owners Ashtenne, or continue with a lease agreement if expansion plans went ahead.

A spokeswoman for Yorkshire Forward said: "Anything that has been negotiated is commercially confidential."

Updated: 10:39 Monday, June 21, 2004