Work is set to start in about a week, and the development will see freight taken by road from the port to Fratton goods yard then taken out of the city by rail.

It also secures the long-term future of the port for freight and represents the end of a 10-year journey to get it off the ground.

The first cargo will leave Portsmouth on November 30.

The problem with a Portsmouth rail freight link has previously been because the track capacity off the main line was too short to make rail freight from the city economically viable compared with road transport.

Now, thanks to a £400,000 European grant and match-funding from the city council, contractors working for the port will lay nearly 1,400ft of new track, ensuring the sidings will be long enough to attract the trade.

Project leader Jerry Clark said: 'For the port it means we can offer an alternative to road. That is necessary because of congestion, but it also means now we can beat the road prices and are possibly quicker. We are going to be aiming at waste paper.

'Waste paper currently goes by road to Shotten in Aylesford in Kent, so now not only can we beat the road price but we have the sustainability angle as well.'

Another example could be getting 50,000 tonnes a year of lubricating oil off the roads.

This currently goes from Le Havre to Widnes by way of Portsmouth.

Another factor behind this is an attempt to keep the banana trade. There is a move towards what is called the containerisation of the banana trade – in essence, large moveable warehouses.

There is a danger the banana trade could increasingly go into Le Havre then be transported by road via Dover and to the central UK depot at Livingston in Scotland.

But rail freight could offer the speed and lower rates required by transport companies.

Mr Clark said: 'It's essential for the port that we offer the service they need. They will go to the port that best meets requirements.'