A property tycoon who saved a historic steam engine museum said he bought it because it would have been a disgrace if the collection had been lost.

Mike Holland stepped in moments before the collection from the British Engineerium in Hove was to be sold at auction yesterday.

Mr Holland, who is chairman of Cherrywood Investments, is thought to have put together a £3 million-plus package, which was the figure quoted to stop the collection being sold.

He said he came to the rescue because he could not bear to see such an important public collection sold off piece by piece.

It is the second time in three weeks that Mr Holland has used his money for the public good. He and parent John Summers paid £2.5 million to save Newlands independent school in Seaford from closure.

Mr Holland, 58, bought the £2 million British Engineerium building and its unrivalled collection of steam engines and engineering artefacts, valued by Bonhams at about £1.2 million, just after 10am yesterday.

The auction was due to start at 10.30am and Mr Holland said he had waited until the last minute because he "just could not believe that some Government body or private investor was not going to come in and save this incredibly important place".

Mr Holland said: "A lot of people should be ashamed of themselves. It's an absolute disgrace it was allowed to get to this stage and I am finding it very hard to understand."

Mr Holland plans to spend £500,000 on revamping the musuem, which will then open up to the public as usual.

He said: "I want to see it flourish. I want a nice restaurant, a caf serving lovely cream teas. I also want to broaden out the history side.

"We have such fantastic history in Brighton and Hove and I want to make the museum a place where people can learn about that as well as the engineering history."

Asked why he decided to step in and save the museum, Mr Holland said: "I am a Brighton chap and I live up the road and I just could not believe no one was going to do anything about this. In the end, no one was going to step in so I had to.

"We could not afford to allow such a wonderful museum as this to close down. It would be short-sighted and silly."

The centrepiece of The Jonathan Minns Collection at the Engineerium is a model of Locomotion No 1 built by George Stephenson in 1825, which is worth about £75,000.

The collection was due to be auctioned in 500 individual lots.

More than 450 people who had come to the auction at the museum off Nevill Road cheered when they heard the collection had been snapped up.

Dr Jonathan Minns, founder and director of the British Engineerium, said: "I am completely elated and humbled. It was a real cliffhanger."

Bonhams chairman Robert Brooks said: "This is one of the finest collections of its kind in the world and we are thrilled that we have been able to keep it together."