Key Points:

Waitakere Mayor Bob Harvey says a Government decision to spend $120 million sinking a double-tracked railway line through the heart of New Lynn has saved the town from destruction.

Added to that will be an investment of up to $55 million in "cash and kind" by Waitakere City Council, and possible private-sector contributions in exchange for air-rights above reinforced trench walls.

"New Lynn was about to be devastated," Mr Harvey said yesterday, after local MP David Cunliffe, who is also Associate Minister of Economic Development, confirmed the Government's agreement to lay a 1km railway trench between Portage Rd on the west bank of the Whau River and a possible extension of Clark St before tracks climb back over Titirangi Rd.

"It would have been chaos with double tracking here and the [level-crossing] barrier arms down," the mayor said.

"New Lynn had no future. It would have had traffic banked up 5km each way. It would have been the centre of frustration. Now it's going to be the centre of celebration."

The Government decision will allow a trench to be sunk up to 8m deep and for road traffic to pass unhindered over "lids" above it at five or more sites, compared with three existing crossings which include an often-bottlenecked roundabout.

Government agency Ontrack will pay for three of those crossings as well as the trench from $600 million allocated to a three-year upgrade of Auckland rail, mostly for duplicating the congested western line.

Waitakere City hopes for subsidies from Land Transport NZ to build another two crossings.

Buses will drop off and collect passengers on both sides of a new train station, and a bridge over the railway line to Great North Rd from an extension of Clark St is also on the cards as Waitakere City performs an extreme makeover on New Lynn's jaded town centre.

Geotechnical investigations are already being conducted, and Ontrack hopes intensive design work in the new year will allow construction to start well before next Christmas, with a view to completing the project by mid-2009, in conjunction with the Auckland Regional Transport Authority.

Mr Cunliffe - who helped to persuade Finance Minister Michael Cullen to accept community concerns and overrule a Treasury recommendation to keep the duplicated railway line at road level - said sinking it into a trench was a "no-brainer" in anticipation of large traffic volumes due to descend on New Lynn from the Mt Roskill motorway extension.

The combination of traffic and delays when the barrier arms were down for trains every five minutes was a "disaster waiting to happen", Mr Cunliffe told a grateful audience of civic leaders at the New Lynn Community Centre.

"That disaster is now averted, and instead we have a world-class transport development. This will be an exemplary project that completely transforms this community."

Ontrack chief executive David George said the railway had dislocated the New Lynn community, and the removal of the barrier it constituted would yield great benefits for the town.

Emphasising that the 2-year-old agency preferred to work with communities rather than against them, he said: "New Lynn is our best shot for getting things right for many decades."

Mayor Harvey attributed the Government's decision to a robust vision his council had been able to impart to all parties by taking them to visit the Perth suburb of Subiaco.

There, a "crummy old railway station" had been transformed into the hub of an exciting urban design project mixing townhouses, cafes and upmarket shops.

Waitakere City hoped to superimpose that model on New Lynn and had conveyed yesterday's news immediately to the Mayor of Subiaco.