Thirty nine years after the crash which killed water speed hero Donald Campbell, there are fresh hopes his boat Bluebird K7 could be restored and on display by 2008.

Mr Campbell died on 4 January 1967, aged 46, while trying to break his own world water speed record on Coniston Water in Cumbria.

The wreckage of the jet-powered boat was recovered from the water in 2001 but a failure to secure lottery funding for its restoration left the future uncertain.  But after submitting a revised application for lottery money, the man leading the restoration project and staff at the museum where it is hoped it will one day be displayed are confident of success.

Bluebird was raised from Coniston Water in March 2001

Bill Smith, restoration project leader

A bid for £940,000 of Heritage Lottery Fund (HLF) money was rejected in March 2005 on the basis a restored boat would be a replica rather than a piece of history.

Mr Campbell's daughter Gina told the BBC in October that she did not want Bluebird displayed in its wrecked state and threatened to dump it back on the lake or sell it on the internet auction site eBay.

Bill Smith has worked on the wreck in a workshop in the North East

The HLF argued that the most important and famous aspect of the boat's history was its crash and it should remain partially damaged.  But Ms Campbell and Mr Smith claim Bluebird should be recognised as a feat of engineering and that it should be displayed in its restored state.

Part of the lottery fund money would be used to build an extension at the Ruskin Museum in Coniston, large enough to house Bluebird. The museum's education officer Mike Humphreys said: "The family didn't want it shown as a wreck.

"To the outside perception it has taken a long time but there have been lots of issues to address. At the moment we all seem to be working together.  "The claim was it would be like a brand new Bluebird and the outside world wouldn't be able to see it as the real Bluebird underneath.

Mr Smith admits there is "very little" difference between the new lottery bid and the unsuccessful previous bid but said: "The big difference is that there are elements that maybe we didn't explain before.

Donald Campbell was aiming for his eighth world water speed record

"The aims and objectives are the same - we can't give in.

"Most people would have given it a wash and brush up and stuck it in a museum but that was not an option for us.

"Nothing is going to happen overnight. It was a successful craft for years before the accident and it's maybe taking a while because the project is being run along the same lines and standards that Donald had."

Ms Campbell had told the BBC: "It will not go on public display as it is, I will not allow it. I want her to look shiny, bright, engineering perfect."

Mr Humphreys said he could understand people who thought Bluebird should be displayed as it was after its most famous moment - the crash - but said the feelings of the Campbell family should be considered too.

He said: "There was a big furore at the time when the boat came out because some people thought it was his grave but there was sympathy with the family because Gina wanted him buried.

Bluebird was propelled 50ft (15m) into the air when it crashed

"I think when Gina saw the wreck she just saw it as the place where her father was killed, but other people have said it's an historical object and should have stayed where it was.

"It can be seen as a bit gruesome and you could compare displaying it as it is with displaying the wrecks of the cars in which Princess Diana or Ayrton Senna died.

"We want to celebrate the achievements of Campbell by showing what a great piece of engineering K7 was.

"We can tell the whole story, running from the earlier attempts which were successful, the actual crash, the film of getting the boat out and the restoration - it will be the whole story."

At the time the original lottery bid was rejected an HLF spokesman said: "We don't think people want to see a replica-like Bluebird they want to see the original that Donald Campbell had his triumphs and tragedy in."

Those wanting to see a restored Bluebird on display will be hoping for a change of heart by June.

The family of the man who died trying to break his own water speed record on Coniston Water have made a fresh call for his speedboat to be restored.

Donald Campbell died when the Bluebird crashed in 1967 as he raced the across the Cumbrian lake. His body and the craft were recovered 30 years later.  His family want the Heritage Lottery Fund (HLF) to rethink their refusal to fund the project which would see the Bluebird restored and put on display.

The underwater surveyor and amateur diver who discovered the wreck, Bill Smith, wants to exhibit the restored craft in the Ruskin and Coniston Museum.

'Homecoming'

Mr Smith said: "The plans for the craft have always been made by its owners, the Campbell Family Heritage Trust. What they don't want to see is a macabre wreck displayed.  "The boat has had more successes than failures and that's how we want it remembered.  "The plan, as hatched in 2001, was to rebuild Bluebird to its original condition and run the boat on the lake again in a sort of triumphant homecoming event."

But HLF has said there are too many question marks for them to hand out £600,000 needed for the work.  HLF manager for the North West Tony Jones said: "We only very rarely support the restoration to working order of high-speed vehicles because of the very high risks posed to them when back in action.  "We fully recognise the importance and drama of the Bluebird story and are encouraging the applicant to focus on a museum-led conservation project which would allow that story to be told."