Wellington, July 9 NZPA - Southland's Kingston Flyer, the vintage train that has carried legions of tourists, may not be puff-puffing much longer.

The company operating the 125-year-old train that runs summer trips twice daily between on the 14km of rails between Kingston and Fairlight is deeply mired in financial problems.

The situation is so bad that Robbie Caldwell, director of Kingston Acquisitions, the company that owns the Flyer, said there was no money to fire up the engine and it would never run again.

He blamed financiers for blocking the sale of the train to a United States company.

Kingston Acquisitions said the engine and carriages were announced for sale in November in an attempt to repay about $4.7 million in overdue loans to Prudential Mortgage Nominees.

But Prudential blocked two offers by US-based company Railmark to buy the train, track and track land for more than $2.25 million.

Railmark had agreed to keep the train going and planned to expand the business, he said.

But the Southland Times reported today that neither that offer nor a subsequent one to buy two related companies that leased the Kingston Inn and train were approved by Prudential Mortgage.

Mr Caldwell said Prudential Mortgage had said it would settle for nothing less than a 100 percent debt clearance, but he believed this was unrealistic in the present climate.

Kingston Acquisitions was set up by developer Dan McEwan, who went bankrupt in March.

Prudential Mortgage Nominees director George Jones declined comment.