Renationalising the rail industry could save more than £500million a year.

That is the estimate by a think-tank which published its findings more than nine months ago.

But the Government – which claims to be prudent with money when it refuses to fund rail and light rail schemes – has shown no interest even though the rail unions agree a better service would result from renationalisation.

The Catalyst think-tank said: “When the railways were privatised it was claimed that subsidies to the private train operating companies taking over passenger franchises were transitional only and would be phased out as the railway improved.

“This specially commissioned report shows that these companies remain wholly reliant upon government pay-outs which are expected to increase in the years ahead.”

Catalyst says that to deliver social, economic and environmental benefits, Britain needs a publicly owned and publicly accountable railway.

The Government is currently spending around £4.5billion a year on the railways, more than it ever spent on British Rail. About £800million of that “leaks out” in returns to private investors.

The Catalyst Working Paper, entitled The performance of the privatised train operators by Jean Shaoul, can be downloaded from: Catalyst

Catalyst was set up in 1998 to promote new, practical policies directed to the redistribution of power wealth and opportunity.

It is not aligned to any political party, but is an “organisation of the left”, of democratic socialists.