Campaigners are pushing to reopen the Maid Marian Line to passengers.
Currently only used by freight trains, the line links the Robin Hood Line at Kirkby with the main Nottingham-Sheffield line at Pye Bridge, via Selston and Pinxton.
Ashfield Council submitted a bid to the Restoring Your Railway fund to reopen the line to passengers, but this week it was announced the Department for Transport would not be progressing with the scheme.
A DfT spokesman said: “We massively appreciate all the hard work and devotion campaigners have put into bids and the work done across the country to restore corners of the railway back into regular passenger service.
“The passion and dedication on show reveals just how much as a nation we love our railways.
“Unfortunately, the Maid Marian scheme wasn’t successful in this funding round.”
Councillors said Government officials admitted the bid was strong, but the level of subsidy would have been too high.
Coun Jason Zadrozny, council leader, said: “I feel desperately sorry for residents, especially young people in Selston parish hoping to access education and jobs. This will be a body blow to our economy in rural places like Jacksdale, Selston and Underwood.”
Coun Matthew Relf, council lead member for regeneration, said: “There will be many disappointed people. This would have open up the ability for direct routes to places like Derby, which would give many people a greener option for travel, helping reduce traffic on the A38.
“We will continue working to deliver the long-held ambition for this line to be reopened.”
And those hopes have been boosted with news of a £1 million Government grant to develop a strategy for its reopening as part of the ‘Toton hub’.
Lee Anderson, Ashfield MP, said: “I have always been deeply committed to restoring this line.
“The Government has made it clear this isn’t dead in the water, despite this bid not being successful. I am hopeful it will go ahead from a different pot of money – the Integrated Rail Plan.
“I will keep lobbying Government to get this funding.”
It is hoped the scheme will link in with the Toton hub Nottinghamshire Council is developing, despite the Government ditching plans for a high-speed railway station at the site, instead switching the HS2 plans to East Midlands Parkway.
Coun Ben Bradley, county council leader and Mansfield MP, said: “The Government is moving towards including projects like the Maid Marian Line in its formal programme of work.
“As part of this, £1m will be allocated to the region to develop a strategy to drive forward wider plans surrounding investment projects at Toton, which includes connectivity to the site such as the Maid Marian Line.
“The Government wants us to pursue the Maid Marian project through that route, rather than via Restoring Your Railway. The scheme has not been scrapped.
“I am delighted the Government has backed the region with £1m to be able to carry out this work and are actively talking about a Mansfield, Ashfield, Toton to London direct rail link, which will play a vital role in Nottinghamshire’s economic future by unlocking vital job, housing, and investment opportunities in the years to come.”