The Cambrian Heritage Railways organisation is bidding for Government funding to reopen the first section of the old Oswestry to Gobowen rail line, that was closed in the 1960s as part of a nationwide axing of lines.
The scheme for a light railway just under a mile long could cost £1.5 million, the first phase of a project to restore the entire line.
It is the third and last round of national funding designed to bring back some of the lines closed in the Beeching cuts.
Roger Date from the Cambrian Railways said applications for the funding had to be in by the end of next week.
He said the application would be to reopen an eighth of a mile of track from Gobowen the the Park Hall halt which would serve the Robert Jones and Agnes Hunt Orthopaedic Hospital.
"The project is all ready to go. The track is there and over the past few years the railway has secured all the land and the buildings including the goods yard at Gobowen.
"We have been promoting the community railway but funding is very hard to come by and there is a need for a feasibility study to develop our aspirations and create a business case.
"We are not talking about great distances, about .8 of a mile to the Park Hall halt and then 2.4 miles to Oswestry station.
"For the first phase it is simply upgrading the track and doing some work to the Whittington Road bridge."
Mr Date said the second stage would mean crossing the A5 Oswestry bypass by putting the railway under the road.
"This is eminently do-able and we have civil engineers that say modern methods can put the railway under the carriageway."
This week Oswestry Town Council became the latest organisation to add its weight to the application for the funding from the Department of Transport. Shropshire Council, the hospital and others are also supporting the bid.
"Everyone is driving this forward, we need this for the economy of Oswestry."
Town mayor, Councillor Duncan Kerr, said he and others on the council were very impressed with what had been done so far with a can do mentality.