Rail track maintenance contracts worth £1billion are to be taken away from private companies, including Amey, Amec, Balfour Beatty, Firth Engineering and Carrillion.

Network Rail announced on 24 October 2003 that it is taking direct control of all track maintence from the summer of 2004.

One result of the decision is that 18,500 workers will be transferred from seven private companies to Network Rail.

Not-for-profit Network Rail had recently announced that it was taking three maintenance contracts from private firms.

But now all maintenance work will be carried out by a unified operations and maintenance organisation for the first time since rail privatisation.

Large-scale track renewal projects worth £2.5billion will continue to be carried out by private companies.

But Bob Crow, general secretary of the RMT union, said: “It must surely be only a matter of time before track renewals are also brought back into public hands.

“This is a major step towards the complete renationalisation of the railways."

A spokesman for the Strategic Rail Authority said: “This is not the beginning of renationalisation. It is simply a sensible rationalisation of Network Rail’s core function, ie maintenance.

“Private sector contractors will continue to play a massive part in the delivery of Britain’s railways.”

Anthony Smith, national director of the Rail Passengers Council, said: “We think passengers will be breathing a sigh of relief."

Mr Smith said in the long term he expected to see better reliability and more affordable fares.

But Rail Regulator Tom Winsor warned: Network Rail must make significant improvements in the way it manages and organises maintenance work.

It must deliver far better network performance, better stewardship and sharply improved efficiency. Its achievements in these respects to date have been far from satisfactory.

The basis of my draft conclusions in the present access charges review - announced on 17 October 2003 - is that Network Rail can and must deliver major reductions in costs and improvements in efficiency and performance.

This includes a significant reduction in unit maintenance costs over five years. My review will provide the funding for the necessary level and quality of maintenance activity to achieve these improvements.

Network Rail is and remains under an obligation to ensure that the maintenance of the national network is carried out in accordance with best practice, efficiently and economically.

That is the position, whether the work is contracted out or done in-house.

I will be monitoring closely the work which Network Rail does to secure more effective and higher quality maintenance of the railway network.