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It can be done, and very successfully. The Editor of "Model Rail" magazine has an O scale layout in his garden using finescale equipment, which makes occasional appearances in the magazine. Peco track is probably your best bet as it's nickel-silver and therefore won't rust, and you will have to do a little more groundwork than for G (you'll need a more solid base - G track can be laid on gravel as per prototype but O will need a concrete base to provide better support). Hope this is of use!
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