RESTORING the derelict Northern Reaches of the Lancaster Canal would spark 800 new jobs, boost tourism by £21 million and unlock private investment worth £45 million, according to major findings revealed this week.

Canal enthusiasts have greeted the findings of the £170,000 study commissioned by the North West Development Agency, which looked at funding, engineering and the benefits of restoring the 14 miles of canal between Kendal and Tewitfield, reports Rachel Kitchen.

The study predicts the restored waterway will:

- Create more than 800 jobs.

- Attract an extra million visitors each year, spending £21 million.

- Bring 35 hectares of "brown field" land into use.

- Support 180 hotel beds, 620 homes and 53,000 square metres of floorspace for shops, leisure, business and industry.

- Unleash private investment worth £45 million.

- Promote biodiversity and create new wetland habitats.

British Waterways' Lancaster Canal manager Debbie Lumb said: "This report in a nutshell confirms what we all passionately believed and needed evidence for it will work."

The Northern Reaches were blocked to boaters in the 1960s when the M6 motorway severed it in three places, but the report says the canal can be channelled beneath the motorway in a culvert. Sixth-formers from Kirkbie Kendal School, Kendal, and Queen Elizabeth School, Kirkby Lonsdale, have been helping to design the engineering solutions.

"Hopefully in 2006 we will see a digger out there starting to dig the first holes," said Mrs Lumb, with boats being able to sail all the way from Kendal to London, via other canal links, by 2008.

She is to talk to Westmorland Agricultural Society members this week about the economic benefits farmers could reap from the canal flowing through their land. Hal Bagot, chairman of the Northern Reaches Restoration Group, stressed the importance of the restoration for farmers in particular, in the wake of foot-and-mouth disease.

With a £50 million pricetag, potential funders such as the North West Development Agency, councils and the Heritage Lottery Fund have all been approached. The next steps are to assemble the funds, resolve land issues and seek planning permission.

Welcoming the report, Kendal town councillor Marilyn Molloy said: "It's going to be a wonderful opportunity for us to be able to promote the town, and it's going to be of enormous benefit in view of unfortunate closures in industrial areas."

South Lakeland District Council economic development portfolio holder Noel Spendlove added: "There are already phone calls coming in from the private sector saying we want to be involved in the project, but of course it's a little early at the moment. But it does attract inward investment, there's no doubt about that."

Meanwhile, the Inland Waterways Association's local publicity officer Janice Simmonds, and husband Peter, said they could not wait for the canal to be restored.