Germany's main train operator is considering a bid to take over Scotland's entire passenger rail network, and may also look at operating in England.

A Deutsche Bahn spokesman told BBC News Online that it was studying the impending tender for Scotrail, whose franchise is due to end in April 2004.

Bids for Scotrail - Britain's biggest rail franchise outside London - are due by the end of this month.

Up to 10 parties are believed to be interested, including possible bids from Dutch, Danish and French operators.

Scotrail, a subsidiary of National Express, has come in for heavy criticism for poor standards of service, and has been hit by strikes.

On track

Deutsche Bahn has also not ruled out bidding for one of the dozen English operating licences that are also up for renewal this year.

Scotland's open spaces are expensive for rail operators

The firm has, however, often argued that the British system - under which the tracks are owned separately from the trains - is not to its taste.

Nonetheless, Deutsche Bahn is under considerable pressure to expand internationally, since it is facing increasing competition in the German market, which it used to control.

State-owned Deutsche Bahn has already dipped its toe into the overseas market, with a freight subsidiary operating on the Benelux and Danish markets.

But a takeover of Scotrail - which handles some 63 million passengers a year - would be by far its biggest foreign venture to date.

Caledonian complications

The intense interest around the Scotrail franchise has come as some surprise to the Strategic Rail Authority, the regulatory body in charge of licensing operators.

The franchise has traditionally been seen as one of the most problematic in the British rail network, since it has a particularly large number of low-traffic routes in isolated regions.

Some of these routes are so unprofitable that rail experts calculate it would be cheaper to send passengers by taxi than provide trains.

And some 90% of Scotland's railway infrastructure is in constant use - far in excess of the 75% ceiling seen as necessary to allow maintenance and repairs to be carried out.

Scotrail has complained that the Scottish network receives far too little investment for its size, and has called for its network to be taken over by the government.