Train services will be reduced under government plans to cut rail firms' funding by a fifth, passenger groups and opposition MPs have warned.

The government's transport policies were branded a "total shambles" after reports ministers want to reduce subsidies to train operators by 20%.

We would see much shabbier stations with much shabbier trains... we might see fewer trains as well at the busiest times Rail Passengers Council

The government said there was less money available after maintenance costs rocketed - and train companies had to "get a grip" on their finances.

Train operators said they cannot cut costs easily, so staff or timetables would have to go instead.

But Richard Bowker, chairman of the Strategic Rail Authority (SRA), said he believed the service would not only be improved but that there would be a "significant growth" in passenger numbers.

He told BBC Radio 4's Today programme: "The railways have suffered over the last four or five years from our total lack of proper planning and a total lack of strategic management. It is now getting better."

'Black hole'

However critics were less optimistic.

Shadow Transport Secretary Tim Collins said: "Not only are plans for better rail services on indefinite hold, but now it appears that even existing services may be cut back dramatically - and passengers expected to pay even more for them."

And John Cartlidge of the Rail Passengers Council said a 20% cut in operators' budgets would mean: "We would see much shabbier stations with much shabbier trains, we'd see fewer staff around.

Mr Bowker: Promise of a better service

"And if the worst came to the worst we might see fewer trains as well at the busiest times... things would get extremely grim."

Correspondents say ministers fear the railway system is becoming a "black hole" for money.

Political correspondent Mark Mardell said the government may be rethinking its entire rail strategy on rail.

The Strategic Rail Authority confirmed it had asked companies currently bidding for franchises - such as Wales and the Borders or the Greater Anglia franchise - to submit plans based on 20% less funding.

"We want the bidder to provide a range of different cost options - maintaining the status quo, enhancing above existing levels, and making savings of 10% to 20%."

'Handful' cut

But a 20% cut in costs would not automatically mean a 20% cut in services, the SRA spokesman stressed.

He said a "handful" of services at worst would be cut.

Mr Bowker is still optimistic there would be a "signifcant growth" in passenger numbers.

He said costs had got too high and there might be some services at the margin that would be affected.

"Passengers do expect and are going to get a more reliable service," he told the BBC.

But he said things were now being turned around.

"Finally we have got a grip on the basic issues that affect our railway industry in terms of cost, service and strategic management. We are going to sort this out," he said.

Mr Collins said this was another sign government's transport policies had been an "utter, complete and total shambles".

"In recent days ministers have announced they can't keep their promises on road congestion... and now we're told they may even cut back on rail subsidies so there'll be even fewer trains in future than in the past," he said.

Gwyneth Dunwoody, of the Transport Select Committee, said:"Cutting back subsidies is not the answer.

"Cutting back some of the incompetent management is."