Virgin's plans for high speed trains could be hit by cuts

Tom Winsor said Network Rail cannot continue spending at its current rate and has proposed delaying improvement work, including upgrades to the West Coast Main Line.

In a report which paves the way for a final decision in December, Mr Winsor said work on the �10bn project should pause at the end of next year so that Network Rail can rethink its spending.

"Costs have gone out of control, they have exploded," he told BBC Radio 4's Today programme.

"The inefficiency that has gone into the company is quite remarkable and my decision...is all about getting out of the system unnecessary cost."

Line speed

Mr Winsor said his final announcement would determine "the size, the quality and the cost of the national railway network".

He said Network Rail was spending around �6bn a year, but that he could get that down to �4bn a year within five years.

See the views of members of the public appointed to Network Rail In pictures

Mr Winsor said work which is not urgent should be delayed, so that it is not carried out while inefficiency and costs are so high.

Postponing some of the work on the West Coast Main Line could save as much as �1bn he claimed.

The solution would mean that some improvements may not happen as fast as passengers had expected, but it was still right to hold-off, Mr Winsor added.

"What taxpayers and the travelling public are not interested in doing is paying much higher than is necessary for a safe, reliable and punctual railway.

"They will get that, but they want to have it at a proper price, with value for money."

He said his proposals did not mean he was against Network Rail or its managers.

"I am right behind them in terms of the work they are doing, but I believe they can make these improvements faster than they are presently projecting," he said.

North West 'lifeline'

Strategic Rail Authority chairman Richard Bowker said Tom Winsor's document was "a major and welcome part of delivering a safer, reliable and affordable railway".

He said the Rail Regulator was "rightly challenging the industry to deliver the West Coast project for the most efficient and economic price", but he said there would be no delay in delivering the strategy and its benefits for passengers and freight customers."

Louise Ellman, Labour MP for Liverpool Riverside, also backed the Rail Regulator in its quest for "efficiencies".

But she said: "This must not be at the expense of the North West's economic lifeline, the West Coast main line."

Halting work on the West Coast Main Line would affect improvements between Liverpool and Glasgow and cause delays to the introduction of tilting trains.

HAVE YOUR SAY Safety is more important than value for money Matt, UK Send us your comments Regulator's tough call for efficiency

That would infuriate companies such as Virgin, which use the line, and the government's Rail Authority which wants improvements that passengers will notice, BBC transport correspondent Tom Symonds said.

Chris Green, chief executive of Virgin Trains, which operates the West Coast line, said: "We would be deeply concerned over yet another delay to the West Coast upgrade and its benefits to passengers."

The Rail Passengers Council welcomed progress towards a consensus on a long-term financial settlement for the railways.

'Potentially unsettling'

The council's chairman Stewart Francis said passengers wanted to see a safe, reliable and efficient railway and that any drive towards increased efficiency was to be welcomed.

But he described the possibility of reviewing the West Coast Main Line plans as "potentially unsettling".

At Network Rail's first annual general meeting, held on Wednesday, 51 people appointed as public members of the not-for-profit company had their first chance to question Railtrack's successor.

One of their main priorities was the controversial system of bonus payments that executives could receive if train punctuality improves.

If it radically improves, five senior managers would get pay rises totalling �1m.