Rail upgrades at risk as budget is slashed by £3bn

Multi-billion plans to improve train services for London commuters were put "at risk" today when Network Rail's budget was slashed by more than £3 billion.

In a draft report, rail regulator Chris Bolt said Network Rail's proposed £31.1 billion budget for running, maintaining and improving Britain's railways between 2009 and 2014 was "too expensive" and should be 11 per cent lower at £27.8 billion.

But rail bosses said the money for the next five years is "insufficient".

Commuter groups warned that the cutbacks could mean the railways returning to the British Rail era of being run "on the cheap" with passengers - and London commuters in particular - paying the price.

Although almost all of the key schemes to improve conditions for long suffering commuters, including the vital Thameslink upgrade, the King's Cross improvements and the Reading station improvements have been given the goahead by Mr Bolt, he has ordered cutbacks for many of the smaller projects.

NR had asked for £824 million for around 50 schemes to improve capacity on urban commuter routes, almost all of them in the South-East.

But Mr Bolt has said these must be carried out for just £573 million, a 31 per cent reduction.

NR bosses did little to hide their dismay at the scale of the cutbacks.

Chief executive Iain Coucher said: "On the face of it, the proposed funding settlement is insufficient. In the coming months, NR will use everything in its power to secure the funding necessary to build a bigger and better railway."

Anthony Smith, chief executive of Passenger Focus, said: "Passengers want to see Network Rail efficient. On the other hand no one wants to go back to railways being run on the cheap."

Commuters arriving at Waterloo expressed their anger. David Wiltshire, 64, a building surveyor who travels in from Guildford, said: "I frequently have to stand all the way and there is regular train congestion approaching London."

Sue Ross, a s Holborn secretary, said: "We need a better railway to improve the environment."

NR releases its financial results tomorrow - including any directors' bonuses. Rail regulators are said to believe that cutting the bonuses of NR bosses would be a more effective way to hold the company to account than issuing a fine.