CRUCIAL talks on a funding package that would secure plans for a £63.8m redevelopment of Nottingham railway station were being held today.

City council chiefs are due to meet Department for Transport officials to thrash out a deal that will allow The Hub project to go ahead despite the impact of the credit crunch.

If an agreement cannot be reached it is likely the plans would have to be shelved.

The talks will seek a flexible funding arrangement that would not require "unnecessary commercial risk" to be taken by the key rail funders of The Hub, particularly East Midlands Trains.

Coun Jane Urquhart, the city council's transport spokesman, said: "The funding issues need to be resolved as a matter of priority. The rail operator's contribution is crucial to the future success of the project."

Nottingham City Council is proposing to contribute £14.8m, 75% of which will come from the Workplace Parking Levy.

The East Midlands Development Agency has earmarked a further £9.5m, while East Midlands Trains has pledged £1.7m, and the Royal Heritage Trust has committed £500,000.

The remaining £37.3m would come from the rail industry, with Network Rail making the initial layout and recouping it in station rents from the franchise holder.

Normally, this would be repaid over 20 years. But council officials speaking today to Chris Mole, Parliamentary Under Secretary of State for Transport, will ask for a longer period – which would reduce the annual charges.

East Midlands Trains is the current franchise holder and its contract runs until 2014.

Whichever company takes over from that point would continue the rent payments.

It has not yet been decided how much longer the extended period of repayment might be.

John Watson, chairman of The Hub Project Board, said: "Most of the funding is now in place and the designs have been approved by the Government Office for the East Midlands. We're just trying to tie up one or two loose ends and hopefully we can get the project moving forward."

The redevelopment of Nottingham railway station is one of the biggest station regeneration projects currently being proposed in the country.

It would put Nottingham on a par with other cities such as Manchester, providing a top-class interchange between train and tram.

David Thornhill, chairman of Notts Campaign For Better Transport, said: "We desperately hope the various bureaucrats can come to a satisfactory agreement on this because Nottingham desperately needs a new railway station.

"When you look at how the business community works, image does count."

jon.robinson@nottinghameveningpost.co.uk