A small part of Abingdon's canal history has been reborn with the opening of a new 150-yard cut, named the Jubilee Junction.

Running from the River Thames to the edge of a former gravel pit south of the town, it is a key section of the project to reopen the old Wilts and Berks Canal, which closed in 1914.

The original link with the Thames was filled in 40 years ago.

A flotilla of craft sailed into the new cut this week to mark its opening.

Abingdon's mayor Peter Green and the vice-chairman of Sutton Courtenay Parish Council, Bill Hanks, cut a yellow ribbon, suspended from both banks.

Mr Green said although it was only a small link, it was the start of an important leisure and economic development for the town.

He said: "A reopened canal will bring important economic benefits to Abingdon and the Vale district. It will encourage leisure tourism, housing development and economic spin-offs."

Project director Martin Buckland said: "The Kennet and Avon Canal reopened 10 years ago and since then has brought enormous economic benefits along its 60-mile stretch.

"A recent Government report showed there had been £30m of economic activity, and almost a quarter was generated for Newbury. The same can happen once the Wilts and Berks Canal is operating again."

The Abingdon junction, costing almost £170,000, is another piece in the jigsaw of the ambitious project to reopen the Wilts and Berks Canal to boaters.

The canal trust received a grant of £54,000 from the Inland Waterways Association, in celebration of its Diamond Jubilee, to construct the new junction. A further £45,000 was granted by Wren, which distributes landfill tax money. The Waterways Recovery Group and the canal trust put in £59,000. The Vale of White Horse District Council added £5,500 and Thames Water £5,000.

During July and August, contractors dug the new cut and volunteers built 380 metres of footpaths, with fishing platforms and seating for disabled people.

The long-term aim is to create a new waterway running south of Abingdon, under Drayton Road and the A34, then rejoining the old route towards Grove, Uffington and Swindon, eventually running for 60 miles to meet the Kennet and Avon Canal, near Devizes.

The plan to have the whole canal in use again by 2014, the 200th anniversary of its opening, could be delayed following a recent Government announcement of budget cuts at British Waterways and the Environment Agency.