End of the line for our quaintest railway?

Fears that the smallest and quaintest railway in Britain, the eight-and- half-mile Island Line on the Isle of Wight, may be closed were heightened yesterday when it emerged that the new operators have been given only a five-year franchise.

The contract offered to Stagecoach was described by the company as a "time-marking deal" - all other franchises have been for between seven and 15 years.

Visitors to the island are often surprised to find that trains on the line from Ryde Pier to Shanklin are 55-year-old former London Underground stock rescued from the scrapyard. However, Brian Cox, the Stagecoach director who will chair the company running the line, said yesterday that there were plans for a renaissance of the line. "We plan to increase the number of passengers by offering discounted fares ... and by using our other transport businesses to bring more people to the island," he said. At present, 780,000 people use the line annually, paying pounds 729,000.

Stagecoach, which has said that 10 out of the 44 jobs on the line must go, will be given pounds 2m in subsidy in the first year, compared with pounds 2.4m received by British Rail.

Stagecoach beat off competition from several other companies which had plans to refurbish or extend services. Mr Cox promised that the same number of services would be operated over the lifetime of the services.

And, as with all franchises, Stagecoach will be expected to improve punctuality and reliability.