Shareholders back £1.3bn Railtrack deal

Railtrack shareholders voted overwhelmingly in favour of accepting the Government's £1.3bn compensation offer yesterday but not before small investors had delivered a blistering attack on it for the way investors had been "mugged".

Ministers were accused of "lying and cheating" and being "morally derelict" and there were several calls for Stephen Byers, the former Secretary of State for Transport, to be put in jail for the "theft" of Railtrack's assets.

The compensation offer worth 245p to 255p a share was approved by a 97 per cent majority at an extraordinary shareholders' meeting as Railtrack's big institutional investors exercised their "bloc vote" in favour. But it only came after private shareholders had vented their fury during the three-hour meeting at London's Alexandra Palace. It was the first opportunity for small shareholders to air their grievances in public since Mr Byers forced Railtrack into administration last October.

Shareholders lined up to attack the Government for its treatment of the company and lambasted the Railtrack board for recommending acceptance of the "derisory" offer.

Alan Crabtree, a retired fish-and-chip shop owner from Rochdale in Lancashire who stands to lose £4,500 on his Railtrack shares, caught the mood of the meeting by declaring: "I don't take kindly to thieves stealing my property. They should get put in jail where Byers belongs."

Another shareholder, Peter Furner, accused Mr Byers and Robin Cook, the Leader of the House, of lying about Railtrack, adding: "We have a government which is rotten to the core. They have lied, cheated and stolen assets from the public."

Other shareholders were more angry at the Railtrack board for recommending acceptance of an offer which, on some calculations, represents just a third of what the Government might be forced to pay if it was taken to court.

"Where's your backbone?" asked one shareholder. "You have won one battle. Why don't you battle on?" Another said the board had allowed itself to be "ridden roughshod over without a fight by government intent on backdoor renationalisation".

Other shareholders questioned why the board had agreed not to pursue legal action against the Government. "The Government is in a panic to get Railtrack out of administration and to do that it needs our approval," said a small shareholder, Jim Middleton. "This is the one card we have in our hand. I think we should throw the ball back in the Government's court by rejecting this offer and saying we are not going to help you until you treat us fairly."

The full result of the meeting will not be known until tomorrow but proxy votes showed 285.7 million shares in favour of the offer ­ equivalent to 53.2 per cent of Railtrack's entire share capital and 96.7 per cent of votes cast. There were 9.3 million proxy votes against.

Geoffrey Howe, Railtrack's chairman, maintained that it would be "grossly irresponsible" for the board to have rejected the offer, saying that even if court action were successful, the chances of a payout materially in excess of 280p were slim.

But the Railtrack Private Shareholders' Action Group, vowed to fight on. It is seeking a £10 contribution from the company's 250,000 shareholders to fund a legal action.