The owners of the Kingston Flyer are blaming a mortgagee company for the closure of the historic Southland railway.
Kingston Acquisitions director Robbie Caldwell says the steam train was put up for sale last November to try to clear more than $4 million of debt.
A $2.5 million offer from American company Railmark was accepted.
However, Mr Caldwell says Prudential Mortgage Nominees would not consider a deal unless it involved payment of all the outstanding debt.
Mr Caldwell says the Kingston Flyer is now to close, with the loss of 25 jobs and Prudential will probably never see any of its money.
Prudential director George Jones has refused to speak to Radio New Zealand.