City gets tough on Byers

Transport Secretary Stephen Byers faced a fresh headache today as the City threatened to boycott future funding of the Tube and railways unless investors are treated fairly over Railtrack.

The Government is looking for £50 billion from the private sector to help finance the struggling rail system and the Underground. But City institutions responsible for more than £500 billion of British pension money have refused to play ball unless their demands are met.

In a private letter to the Government, the City said: "It is not realistic to expect the capital markets - foreign or domestic - to provide future funding for the UK rail infrastructure, on reasonable terms, unless confidence is restored."

Meetings between leading City firms and the Government are being held today to discuss the problem.