The Rail Revival Alliance will launch a fresh push for the plan ahead of this year’s state election, with only the Maryborough to Castlemaine link needing to be fixed at an estimated cost of $300 million.

But Ms Allan said the project did not stack up and would not be considered.

“This proposition was rejected by the National Liberal parties when they were in government, when they had a look at this,” she said.

“I must say I have a lot of people talking to me about how we can make improvements to the Bendigo-Melbourne line, the Echuca-Bendigo line, how we can make those improvements.

“That’s where the demand is, and that’s why we’re responding as part of this regional rail revival package of works.”

When asked if the plan could revitalise small towns and if there was an expressed demand, Ms Allan replied: “no”.

An Infrastructure Victoria report from 2016 found the plan would be too costly and favoured buses between regional centres.

The Rail Revival Alliance accused Infrastructure Victoria of “bureaucratic arrogance” and questioned whether it had accurately determined demand for the link.

Jacinta Allan has promised more services for Epsom, Eaglehawk and up to Echuca once $91 million worth of signal and track upgrades are complete in the coming years.

The federal government signed off on $1.7 billion in funding for the state government’s Regional Rail Revival project, which includes $91 million to upgrade the line between Bendigo and Echuca.

The upgrades will allow trains to travel up to 130 kilometres per hour, rather than the current limit of 80.

Ms Allan, the Member for Bendigo East, said the upgrade would work in tandem with the introduction of 87 new VLocity carriages to the network.

“We already run VLocitys on this line but they have to run at reduced speed,” she said.

“So doing the track upgrades, doing the level crossing upgrades, means that we can run these trains faster between Bendigo and Echuca.

“The work on the Echuca line can start in the coming months, it will take a little while to complete those works.”

The reshuffle of federal infrastructure ministers in recent months meant the funding remained up in the air until it was finalised by the federal government on Friday.

Signalling works will be undertaken between Bendigo and Epsom, and Bendigo and Eaglehawk, to accommodate the new fleet of carriages.

Ms Allan said the increased services would support stage two of the Bendigo Metro rail project.

Victoria also became the first state government to sign up to the Inland Rail project, linking freight services from Melbourne to Brisbane.

Earlier this month, the Victorian Coalition promised to spend $633 million to purchase 96 new long haul trains to replace the current diesel-hauled fleet.

Shadow minister for regional Victoria Peter Walsh said the plan would help to “decentralise” Victoria’s population.

He welcomed the federal government’s commitment to support the Regional Rail Revival program.