Plans to sell off a heritage railway have been shelved by Somerset County Council after a bidding process failed to find a suitable buyer.
The authority wanted to sell West Somerset Railway (WSR) if criteria to safeguard its preservation were met.
Council leader John Osman said: "In the end it comes down to the simple fact that neither proposal fully met our criteria."
The railway uses steam locomotives and is run by West Somerset Railway Plc.
The two bidders for the freehold were West Somerset Railway Plc and the West Somerset Railway Association (WSRA).
Mr Osman added: "There were very good reasons to take this sale forward but if the proposals do not match up with our criteria then we can't proceed."
As a result of the decision, the WSRA has said it wants to begin negotiating with the West Somerset Railway Plc to make a joint bid.
A WSRA spokesman said: "We believe that the best interests of the heritage railway will be served by a further unified bid to be submitted without delay which satisfies the requirements of both parties as well as ensuring the long term future of the railway."
The 20-mile (32 km) line between Minehead and Taunton was closed by British Railways in 1971.
The following year, the council bought the branch line and leased it to the WSR.