The government has decided to reconnect Corby in Northamptonshire to the mainline railway network, bringing to an end a five-year campaign to restore direct links to the town and boosting its plans to expand.

Bob Lane, chief executive of the North Northants Development Company, said: “This will help with the speed, volume, quality and price of development. It will enable us to bring a wider range of housing into the town. We’ve got to 700 completions a year without the station, but we need it to get to 1,000.”

Bee Bee Developments has planning permission for 5,000 homes in Corby, which it plans to develop with volume housebuilders. Aldred Drummond, the company’s spokesperson, said the restoration of rail services would increase the likelihood of planned development coming forward.

The rail service, axed in 1990, will bring Corby within one hour’s distance of London’s St Pancras and means it will no longer be the largest town in the EU without a station.

Tom Harris, the rail minister, announced that railway provider the Stagecoach Group will run the service. Existing services to Kettering, 13km south of the town, will be extended to Corby from December 2008.

A planning application for a new station is due to be submitted in the next few weeks.