BOLD plans for a £50 million redevelopment of The National Railway Museum in York have suffered a setback after a £13 million funding bid was rejected.

Museum director Judith McNicol confirmed that an application to the Heritage Lottery Fund (HLF) for £13.4 million to upgrade the Great Hall, build the interactive Wonderlab and create a new Open Store had been turned down.

But she said she is optimistic about the future of the project.

Ms McNicol said: “We will now take some time to review the phasing for the projects that form our vision and how these best fit with the exciting plans for York Central.

“Whilst we are disappointed to receive the news that our Stage One bid to the HLF for £13.4 million to redevelop the Great Hall and create a new Open Store and Wonderlab was not successful, we remain completely committed to our vision.

“Alongside telling epic stories, we have a vital role to play in engaging the next generation of engineers and helping to plug the skills gap through inspiring young minds.”

She said it is hoped funding will also come from a range of sources including central and local government, foundations and other funding streams, adding: “We are very fortunate that there are a lot of people who are very keen on the railways and engineering. They are very keen to support us, which is fantastic.

“I am very optimistic about the opportunities for other funding given the enthusiasm that has been shown for our vision.”

The news comes as the museum unveiled Britain’s first prototype Hyperloop pod, developed at the University of Edinburgh, as a sign of the organisation’s focus on the future.

Hyperloop technology could one day see passengers travelling in pods at speeds of up to 650mph inside near-vacuum tubes. It would mean the journey between York and London could take just 20 minutes.

Ms McNicol said the museum’s ambition is to become “more relevant” and inspire the engineers of the future.

She added: “The new Hyperloop pod is about the possibilities of travel in the future.

“It is testing out what is possible, the same way Stephenson’s Rocket did in its day. The possibilities for the future of travel are exciting.

“A lot of the museum is about the past. It’s quite factual, which is important, but we want to tell the stories of our railways. Britain changed the world, we invented this and the world changed because of it.”

The Hyperloop pod will go on display at the museum later this year and the original Stephenson’s Rocket will also be coming to the museum in about three year’s time.