Railtrack looks set to keep its regional HQ in York, saving 500 rail jobs for the city. The company's national investment committee was this afternoon considering a proposal to build a new headquarters for its London North Eastern zone next to the railway station.

But the scheme is running into opposition from the adjacent York Railway Institute in Queen Street, which would stand to lose sporting facilities in buildings under lease from Railtrack.

The rail infrastructure company wants the buildings back within 12 months, so that construction work can start by this time next year, with completion by 2001. The institute's social club is not needed back by Railtrack.

Colin Ward, general manager of the Institute, which has an open membership of 3,000, said today the move could "cause a lot of problems".

"We would be upset if this happens but we have had nothing in writing yet. We don't have the funds for any new-build project, and York would miss a very valuable and well-used facility."

A Railtrack spokeswoman said: "We are in discussions with the Railway Institute to see if we can help them maintain some facilities while the work is ongoing."

News of the new HQ came as Railtrack was set to announce a £27 billion package to revamp Britain's railway infrastructure - including a £1 billion upgrade of the East Coast main line through York.

The revamp, likely to be announced on Thursday, will include a host of improvements to tracks, stations and airport links, including the re-development of York station.

Railtrack's staff in York currently work at seven different sites, including several buildings in Station Rise, and others at Tanner Row, Blossom Street and Rowntree Wharf.

The new HQ would provide one central location, bang next door to the station, where all staff could be based.

Railtrack has considered moving away from York to place such as Leeds, but concluded that it should remain in the railway capital of the north.

A spokeswoman said today that if the committee this afternoon approved the investment plan, and Railtrack was committed to staying in the city, it would prompt other rail businesses to stay in the city.

The company originally considered locating within a triangle of vacant land behind the station which it owns.

The spokeswoman said it was still intended to develop up this site but the company needed to move quickly onto land that was available and commercially viable.

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