The assertion from Hunter Development Corporation (HDC) came after Newcastle City Council put light rail back on the agenda on Tuesday night.

Councillors resolved to take a one-day trip to Melbourne to look at a heavy rail line that has been converted to carry trams.

They hoped to learn how that city's system might be implemented in Newcastle.

The corporation had assessed city transport options, as part of its Newcastle City Centre Renewal Report, which was issued recently.

The bold vision for reviving the heart of Newcastle includes cutting the rail line at Wickham and providing an improved integrated public transport system.

A corporation spokesman said yesterday that light rail was not considered feasible.

"It's each councillor's prerogative to weigh up all the options for themselves," he said.

"However, light rail cannot achieve operational viability running along the corridor between Broadmeadow and Newcastle East. Not enough people live close to the corridor and it is not connected to a much wider network. By contrast, Melbourne's network is vast and is connected to a vastly bigger population."

Newcastle light rail advocates and Lord Mayor John Tate have cited Queensland's Gold Coast as an example to follow.

Gold Coast City Council secured $365 million from the Federal Government recently to build a light rail system. But the council has committed $150 million of its own money and expects to attract private investment.