thought it might be possible by creating another local network and assigining it a specific router or something
It should be possible to do what you are describing above. However, it will be difficult if the two networks need to share things like servers, printers, etc. I think this thread
http://forums.contribs.org/index.php/topic,42445.0.html may give you the information you need to achieve the connection between the two networks.
(You will need a second and maybe a third router for this.)
Internet Internet
v v
SME Router
v v
v v
Lan 1>>>> router <<<<<<<Lan 2
I would not like to be the person supporting this....