The Wensleydale Railway has already begun work to upgrade the track between Leeming Bar and Northallerton, in North Yorkshire, to make it suitable for passenger trains.
 
A new terminus is planned at Northallerton, with the aim of running the first passengers on the route in time for the line's tenth anniversary on 4 Jun 2013, next year.
 
The extension would allow passengers to travel from Northallerton to Redmire, on the edge of the Yorkshire Dales National Park.
 
It would also mean the railway could accept passenger charter trains onto its line.
 
Railway bosses are looking to build the platform near Springwell Lane, in Northallerton, which is within walking distance of Northallerton Station and the East Coast Main Line.
 
However, a proposal to reinstate the so-called South Curve of track into Northallerton Station has being ruled out in the short-term after surveys suggested the work would cost about £6 million.
 
Ken Monkman, chairman of the Wensleydale Railway Association, said, ";It's exciting times, although there is still much hard work to do."
 
This week, railway volunteers are being helped to replace sleepers and add ballast to the track by members of the Territorial Army's railways unit.
 
A new maintenance shed is proposed at Leeming Bar.
 
The fundraising drive will also pay for upgrades to the existing line between Leeming Bar and Redmire, including a new signalling system at Constable Burton and improved passenger facilities at the stations.
 
Some of the money will also be used to produce surveys to examine the cost of extending the line west towards Castle Bolton and then on to Aysgarth.
 
Nearly £25,000 has already been raised.
 
Mr. Monkman said trains would not run every weekend from Northallerton, but would be reserved for special occasions such as the Dales Festival of Food and Drink, in Leyburn, or Middleham Stables Open Day.
 
He added, "We're appealing to everybody and anybody to raise the money we need."
 
Joe Willis.