The resignation of the man in charge of the German railways' supervisory board came because the government had failed to back him, Dieter Vogel said.

"The government did not clearly position itself behind me," he said in his resignation letter.

It was Mr Vogel's differences with the railways' chairman over reforms of Deutsche Bahn that led to the resignation according to sources on the board.

The national railways have been marred by huge losses which have seriously delayed a privatisation.

Last autumn, chairman Hartmut Medhorn said he would consider selling a stake in the business to a foreign rail operator to ease a funding crisis faced by the railways.

Deutsche Bahn's financial losses had been described as catastrophic by German government ministers.

Privatisation delayed

The government has tried to privatise the railways since the early 1990s, but the losses have made this virtually impossible.

In the latest of many delays to the privatisation plans, it has been decided that ambitions to sell off the railways in 2004 will be scrapped.

Mr Medhorn hopes to push on with the privatisation in 2007.

Ahead of Mr Vogel's resignation, chancellor Gerhard Schroeder had hinted that management changes could result unless the board towed the line set by the railways' chairman.

"One or two things must change" unless the board backs chairman Hartmut Mehdorn's policies, Mr Schroeder said.

Package tour giant Preussag's chief executive Michael Frenzel, who is also an existing Deutsche Bahn board member, will succeed Mr Vogel, the German Transport Ministry said.

The government will inject 26bn marks (�8.4bn, $12.3, 13.3 euros) into the company to support it over the next four years, in exchange for more control, the German newspaper Handelsblatt reported.