The Post recently reported that the council had applied to the Museum four to five years ago for the 1837 Maudslay Sons and Field's engine to be returned to the city.

Efforts have ramped up since the government's announcement it would relocate the Museum to Parramatta. The move would have left little room for large item display, like the Maudslay.

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But the state has now committed to leaving the Ultimo site alone and building a second Powerhouse Museum at Parramatta.

Council general manager Warwick Bennett said to his knowledge, the engine's return was still progressing.

"We are still pursuing a Memorandum of Understanding (MoU) to relocate it back to the (Goulburn) Waterworks," he said.

"We haven't heard anything to the contrary."

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The distinctive Maudslay once powered an industrial complex at the Old Goulburn Brewery. It was moved to Sydney's Museum of Applied Arts and Sciences in the 1920s but questions have swirled over whether this was its owner, WJ Bartlett's intent.

Old Goulburn Brewery owner Michael O'Halloran said it should return to the city, preferably at his complex.

But Mr Bennett said The Waterworks best matched The Powerhouse's criteria.

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"There are a number of conditions in the draft MoU and The Powerhouse is best placed to deal with these issues," he said.

"It must be in a public place that's open to the public and has to be outside a flood zone."

The Old Brewery is in a flood zone.

The council is awaiting the MoU and its full conditions to see how The Waterworks has to be adapted to accommodate the Maudslay.

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Local engineer and steam enthusiast Ken Ainsworth is helping with the project.

A spokeswoman for The Powerhouse said the Museum regularly loaned objects to regional NSW facilities and this would continue into the future.

"We look forward to continuing discussions with The Waterworks about the Beam Engine made by Maudslay Sons & Field," she said.

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