In 1884, the Admiralty commenced the construction of a large breakwater from the south side of Peterhead Bay, to create a harbour safe in all weathers. The granite used in the concrete was excavated from a quarry on Stirling Hill, by convicts from Peterhead Prison. To carry the convicts to and from the workplaces, and to transport the granite from the quarry, a well-engineered railway was constructed in 1887/8. Despite a length of just 2.5 miles, it had a viaduct of several granite spans, a steel girder bridge (pictured above) across the turnpike road, two masonry overbridges and substantial embankments and cuttings. Signalling was by absolute block, with three cabins linked by electrical telegraph. Prisoners were carried in four purpose-built secure coaches (a restored example being on view at Maud Museum ). Granite was carried in open steel wagons. Motive power was provided by five six-coupled tank engines, each named after members of the Royal Family.

As may be seen, the Admiralty line extended to within about 300 yards of the GNSR Cruden line. Many attempts were made to persuade GNSR (and subsequently L&NER) to extend this line to Peterhead. This was never done, not least because the shorter distance would have meant less revenue from the Peterhead traffic. A smaller railway (no pictures known) was built around 1910 to assist in the construction of the north breakwater. This was not connected to GNSR metals, either. The Peterhead Harbour of Refuge Railway was dismantled, and track lifted, starting in 1950, the process lasting almost eight years.