The Transport Secretary, Stephen Byers, yesterday performed a humiliating U-turn over regulation of the rail industry after sustained pressure from the private sector.
Mr Byers endorsed a concordat signed by the Rail Regulator Tom Winsor and Richard Bowker, the chairman of the Strategic Rail Authority, which expresses the continuing need for both bodies.
The Transport Secretary had indicated last September that he wanted to create a single strategic and regulatory organisation for the industry.
While he has been more cautious in his comments since he made the remarks, yesterday he explicitly endorsed the continuing existence of both the Regulator and the SRA.
Train operating companies and other businesses involved in the network had expressed deep concern that without Mr Winsor's independent organisation there would be no effective process of appeal against decisions by the SRA, which exists to carry out government policy. The concordat makes clear that the two organisations have the same statutory objectives and separate and complementary jurisdictions and that there is no overlap or competition.
One senior industry source said Mr Byer's endorsement of the agreement was a "welcome acknowledgement of the need for independent economic regulation".