Mr Prescott confirmed that he was chairing a policy group which is drawing up options for ensuring BR is a "publicly owned railway and publicly accountable under the next Labour government".
Public ownership of BR is now the biggest test facing Tony Blair, the party leader, as he embarks this week on a crusade of Labour constituencies across Britain to secure support for his plans to change Clause IV of the party's constitution on public ownership.
Mr Prescott said: "The aim is clear - to ensure a publicly owned, publicly accountable railway. But first and foremost, we are determined to stop this privatisation just as we did the Post Office, because we know what it means - fewer trains, higher prices, and the kind of chaos being proposed on through-ticketing."
Union leaders seized on Mr Prescott's remarks as evidence that they are winning the argument with the Labour leadership on British Rail, which they see as the biggest test for Mr Blair's plans to change Clause IV.
Lew Adams, general secretary of the Aslef train drivers' union, said it represented a hardening of Labour's policy.
Mr Blair last week carefully avoided any pledge to renationalise parts of BR in spite of challenges by the Prime Minister. Leadership sources said Mr Blair's reticence was an attempt to focus on stopping privatisation, and to avoid being blown on to the Tory agenda about how Labour would compensate companies and shareholders.
But Alastair Campbell, Mr Blair's press secretary, made it clear in a television interview yesterday that Mr Prescott's commitment stopped short of a pledge to return BR to public ownership if the Tories went ahead with privatisation, whatever the cost.
"I am saying if the railways are not privatised what this group is doing is making sure that we have plans that under a Labour government the railways will be publicly owned, public run railways,'' he said.
"If they are crazy enough to go ahead with it, this committee will come up with an answer. But there is a commitment that there will be a publicly owned, publicly accountable railways under a Labour government."
John Edmonds, general secretary of the GMB union, said on BBC's On the Record restoring the railways to public ownership would help to unite Labour but would be "hideously difficult".
He said: "All of us want that commitment. The British people want that commitment. But you have to count the cost. Its not practical politics to give these commitments unless you know how to do it and unless you know where you can find the money."
Those close to the Prescott policy group confirmed that it was unlikely Labour would seek to buy back a controlling stake in parts of BR which were sold off, such as Railtrack, which could cost an estimated £4bn.
The Transport Secretary, Brian Mawhinney, attacked the confusion in Labour's ranks and accused the party leadership of being in a "shambles" over its policy on public ownership. He confirmed the Government's intention to franchise more than half of the 26 BR train operating companies by the middle of next year, and to sell off a stake in Railtrack.
"Just what is Labour's policy? It is a shambles. There are two simple questions for Mr Blair: do you intend to renationalise the railways? And if you do intend to renationalise, how do you intend to fulfil your commitment to reverse the decline in railway use?" Dr Mawhinney said. He added that the confusion would make Labour regret forcing a debate on BR on Wednesday. But Brian Wilson, a shadow trade minister and member of the Prescott group, said the Tories would be "running scared" of rail pr ivatisation because it was so unpopular with their constituents. He said the proposal by the rail regulator to reduce through-ticketing stations had confirmed their fears.
The regulator is shortly to announce minimum standards of service for the franchise companies. Mr Wilson said he would face a dilemma of having to set the standards low enough to encourage private companies to bid for franchises but high enough to avoid a public outcry.
Labour's strategy is to concentrate on stopping privatisation taking place by warning the companies bidding for franchises that it will demand higher standards of service and safety, making it unprofitable.Reuse content