Government advisers estimate that by the close of registration in six days' time, 1.6 million to 1.7 million small shareholders will have registered with share shops to take part in the pounds 1.8bn offer.
This compares with the 3 million registrations received for last year's sale of the Government's remaining stakes in National Power and PowerGen.
The figures suggest that Labour's warnings about the risks involved in buying Railtrack shares have begun to percolate through to investors.
They also indicate that the unprecedented inducements to tempt the public have only been a partial success. For the first time, investors will be entitled to a share of pounds 69m in dividends earned when Railtrack was still in public ownership.
Railtrack shares are expected to produce a total return of 15-20 per cent in the first year - a higher yield than has been offered in an previous Government sell-off.
Investors who take part in the public offer will also be eligible for a 15p discount to the price paid by institutional investors on their first instalment and further incentives in the form of bonus shares or additional discount on the final instalment.
By last Friday night 1.4 million people had registered with one of the 110 share shops involved in the offer. Of these, 140,000 are active investors who have been automatically registered by a share shop.
Government advisers maintained that the response from the public was in line with expectations given the nature of the Railtrack sell-off and its size. The offer is half the size of the generators sale last year and the marketing and advertising budget is also only half the size.
The level of registrations still suggests the offer will be oversubscribed. The Government is setting aside at least 30 per cent of the shares for small investors.