Jarvis blames the job cuts on a reduced workload

The job cuts will hit sites in Doncaster, Manchester and Chester.

The firm blamed a reduced workload this year and into 2005 for the cutback among its 286 staff in signalling design and delivery.

The Transport Salaried Staffs Association said it was "crazy" to cut jobs when the railway industry had severe capacity problems.

'Crazy world'

Negotiations officer Steve Coe said that having brought maintenance in-house, Network Rail should now assume direct responsibility for track and signalling renewals work.

"Only in the crazy world of the privatised railway could there be a situation where Network Rail is boasting about how much they are spending on new signalling, while starving one of their main contractors of work.

Jarvis said it hoped to avoid compulsory redundancies by seeking volunteers as well as redeploying staff.

"Jarvis is also liaising with Network Rail to try to ensure that skills are not lost to the industry," said a spokesman.