Railtrack investors seek to uncover secret papers in case against Byers

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The Independent Online

Lawyers acting for disgruntled Railtrack shareholders are preparing to use the Freedom of Information Act to access sensitive government files which they hope will prove that the company was put into administration unlawfully.

The memos and minutes of meetings will be used as evidence in a court case against the former transport secretary, Stephen Byers, which is due to start on 27 June.

Represented by the law firm Edwin Coe and Michael Crystal QC, the group of 55,000 private shareholders are planning to lodge requests in the next few weeks for documents held by the Office of National Statistics (ONS).

Under the new Act, which came into force yesterday, the Government must disclose the information within 20 days of request. If it refuses, the case will be passed to an independent arbiter. It would be a criminal offence to destroy the documents.

The Railtrack shareholders are seeking information on a controversial ruling made by the ONS on 1 October 2001 which six days later led Mr Byers to put Railtrack into administration. The ONS ruled that a proposal to hand over £5bn worth of government grants, through a new company known as Renewco, would be classed as government borrowing.

Mr Byers' Department for Transport had always insisted that the Renewco plans would not go ahead if the grant appeared in the Government's books. It cited the ONS ruling as a reason for putting Railtrack into administration.

However, an earlier ONS ruling in April 2001 declared that Renewco would not feature on the Government's balance sheet. The ONS said it had decided to take a second look at the issue after receiving "new information" from the Treasury.

It is understood investors want to know why the ONS changed its mind - a move that meant millions of pounds were wiped off the value of Railtrack shares overnight.

David Greene, head of litigation at Edwin Coe, the law firm acting for Railtrack's private shareholders, said: "We are planning to use the Freedom of Information Act with certain government institutions. For example, we will use it to gain information held by the ONS. We are very interested in the ONS's determination in the lead-up to administration." He refused to comment further.

The court case could threaten the hopes of a post-election comeback by Mr Byers.

A spokeswoman for the Department for Transport said: "The Government does not accept Railtrack shareholders have any right of action against it, or that it acted unlawfully. The Government will defend itself robustly."

News that the private shareholders are planning to access sensitive ONS documents comes a week after it emerged that they had uncovered Whitehall emails on the demise of Railtrack. It is reported that the emails were sent between Dan Corry, the former special adviser to Mr Byers; Shriti Vadera, special adviser to Chancellor Gordon Brown; and Brian Hackland, an official at the Number 10 Policy Unit.

The Treasury has tried to distance itself from the scandal, claiming that its role was only one of contingency planning should the track company go bust. But it has been claimed that the emails prove the Treasury was more closely involved than this.