Dr Brian Mawhinney, Secretary of State for Transport, discussed the 'doomsday scenario' with Bob Reid, chairman of British Rail and Bob Horton, chairman of Railtrack, in private talks aimed at bringing the long-running conflict to an end.
Industry sources fear that if the plan is implemented, it will revive proposals floated a decade ago to slash the national network from 10,000 miles to fewer than 2,000 miles - leaving much of the country without a rail service.
The joint initiative by the Government and the railway authorities envisages dismissing all but 1,500 of the signal staff, and concentrating them on lucrative inter-city and commuter routes which could then run normal services in defiance of the signallers' union, RMT.
This 'core network' looks uncannily like the railway map of Britain recommended by the Serpell Report in 1983, which was rejected by the Government at the time, but could now prove attractive in the face of stalemate over the strike.
Frank Dobson, Shadow Transport Secretary, said yesterday: 'They are prepared to wreck the rail network - possibly for ever - rather than find an extra couple of million pounds to settle the dispute.'
RMT leaders, who have called a two-day signal workers' strike from midnight tomorrow and a further one-day stoppage next week, are apprehensive about the prospect of line closures and job cutbacks.
But Jimmy Knapp, the union's general secretary, says in an Independent on Sunday interview today: 'I don't think the public of this country will stand for another Beeching era.
'There will be an outcry if there is any attempt whatsoever made to bring line closures back on to the agenda. It would be a highly dangerous political exercise, and highly damaging to industrial health and environmental welfare.'
A spokeswoman for the Department of Transport last night formally denied the existence of the 'core network' plan, but refused to comment on details of the private meeting between Dr Mawhinney and the railway authorities.
A threatened London Underground strike has been avoided after Aslef Tube drivers yesterday accepted an improved 2.5 per cent pay increase.Reuse content