The campaign to reopen the railway line from Portishead to Bristol has been given fresh hope by the Government.

Transport Secretary Geoff Hoon announced a grant to allow local authorities to put on new rail services by reinstating mothballed lines, building stations or switching freight lines to passenger travel.

The scheme – which follows years of criticism that the rules make it virtually impossible to reopen lines – could breathe life into stalled projects.

Campaigners for the Portishead line welcomed the announcement.

But the councillor in charge of transport at North Somerset Council criticised the plan, despite the local authority having been involved in negotiations to buy the land where the line runs to ensure it would be used as a railway in the future.

The fund means town halls or passenger transport authorities seeking the go-ahead for new rail services would no longer have to prove they would attract sufficient passengers long into the future.

Instead they would only have to prove financial viability for three years – after which the service would be taken into a wider franchise agreement.

Portishead Railway Group chairman Alan Matthews, who has led the campaign to get the railway reinstated for several years, was pleased with the announcement.

"In the past the Government has focused on road and bus travel, but now seems to be looking more seriously at the potential of rail links," he said.

"To hear this money has been allocated is great news.

"Following the news that North Somerset Council is to carry out a technical evaluation of reopening the line, this is another piece in the jigsaw towards a rail service running out of Portishead."

But the council's executive member for strategic planning, Councillor Elfan Ap Rees, said the Government should take the financial burden of reopening the line.

It would cost about £15 million to open the line, with an estimated 500,000 and one million passengers expected to use the service each year.

"There is no way that North Somerset council can afford to subsidise a rail line," said Mr Ap Rees.

"It is important that the Government accepts responsibility for this. It requires us to build large numbers of new houses but it isn't providing the transport infrastructure required to get them to work everyday."

North Somerset Council appointed Network Rail to carry out a technical evaluation on the potential re-opening of the three-mile line between Portishead and Portbury, after a feasibility study found it would be possible to open the track and that trains could be running by 2014.

The Government's announcement means local authorities would be able to apply for funds to open lines and stations but would have to find money to cover the costs for the first three years. That could be through applying for grants or working with private firms.

The money would not be available until 2014, well after the next election, and no amount has been announced for the size of the fund.

"There are lots of campaigns around the country for new rail services," said Transport Secretary Mr Hoon.

"But the usual problem the local authority faces is that they have difficulty guaranteeing the revenue to make it financially viable.

"This change is a good offer, because it is a slightly bizarre exercise to discuss what might, or might not, be happening in 2020 and to make forecasts about likely revenue."

Following the Beeching cuts of the 1960s, about 9,000 miles of track was ripped up or mothballed and 4,000 stations were closed.