An engineering contractor which was brought in to help build the Croxley Rail Link has been bought out after entering administration.

Mouchel, which was brought in to complete all engineering, environmental, consultation and land referencing elements of the £120million project, announced the news on Saturday.

The rail link will connect the Metropolitan tube link to Watford Junction via a viaduct which will be built from Croxley Green, across the busy A412 and into West Watford.

Mouchel, which deals largely in government contracts, entered administration after its shareholders rejected plans to swap its debt for stock.

On Saturday afternoon, MRBL Limited, which is made up of RBS, Lloyds Banking Group and Barclays, and the group's management acquired the businesses of Mouchel from the administrator.

Grant Rumbles, chief executive of Mouchel, said: "The completion of this restructuring means that the long-term future of this business is secure and the jobs of more than 8,000 people have been preserved.

"We now have the right capital structure to take Mouchel forward. For our clients and suppliers it is business as usual.

"Mouchel will be in a strong position to rebuild the business and start winning large contracts again. I'm pleased to say that we now have everything in place to be a stable and successful business."

The new rail link will connect Croxley Station on the Metropolitan Line with currently disused track between Croxley Green and Watford High Street overground station.

A rail bridge will run from Baldwins Lane in Croxley Green, past the Harvester restaurant and over the dual carriageway.

Both Richard Harrington, MP for Watford, and the town's mayor Dorothy Thornhill lobbied heavily for the Croxley Rail Link project to go ahead.

Mr Harrington said: "I have always found Mouchel very organised and very professional to deal with.

"I think this is just a technicality, they have swapped their debt for equity and it's business as usual."

Ms Thornhill said: “When I heard the news I had a moment of anxiety and wanted to be reassured as soon as I got in this morning.

“Everything will transfer over to the new company. Hopefully it will be a smooth transfer, and they will be as excited about the Croxley Rail Link as we are.”

The new railway will then run along Watford Road, the Grand Union canal, and through west Watford, where two new stations will be built in Ascot Road and Vicarage Road .

A total of £76.24m from the Department for Transport has been secured for the project, but £40.46m from "local contributions" will also be needed to make the scheme a reality.

Local contributions from the county council come from three different sources, and most will be borrowed and paid back with profits when the line is open.

The county council itself must find £33.7 million, 28.9 per cent of the total costs: this breaks down into £6.77 million from the general capital programme, £930,000 from the sale of land in Ascot Road, and £26 million of proposed profits from the link once it is running.

Added to that is £6.864m worth of "section 106" funding, which is money given to the council by a developer to negate the effects of what it is building.