Wellington, Nov 11 NZPA - The troubled Kingston Flyer Steam Train company has been placed in receivership.

Kingston Acquisitions Ltd (KAL), which owns the train and 80 hectares of development land owes about $4.7 million to financier Prudential Mortgage Nominees, who placed the company in receivership on Friday.

Receiver Lindsay McClean, of Malloch McClean Queenstown, told the Southland Times KAL had defaulted on its payments.

He said it was too soon to say whether creditors and investors would get any money.

While Prudential had previously blocked an attempt to sell the train to an American buyer, KAL's assets will now be sold in an international tender.

Kingston Community Association chairman Peter Gibson welcomed the news as a new owner may get the train running again.

He said if no buyer was found the community would try to raise the cash and take ownership.

KAL had been an investment scheme of bankrupt developer Dan McEwan who saw several ambitious operations collapse, leaving investors out of pocket.

In September the Government has ruled out supporting the train.

The prime minister's office said the iconic steam train's future was up to the mortgage company and its operators.