Darkness at the end of the tunnel

The Channel Tunnel has lost its innocence and may well have lost any hope of financial salvation. Promised as the safest form of travel between Britain and Europe, it suffered the fire that everyone feared: a conflagration which, although claiming no lives, has dimmed hopes of light ever emerging at the end of the tunnel's short but troubled existence.

Monday night's fire may not have caused any deaths, but it was a very serious event which will prevent any trains using the tunnel at all until late today at the earliest, and will will close one of the two main train tunnels for several weeks, causing severe disruption to both Le Shuttle and Eurostar services. All 34 passengers suffered from the effects of smoke inhalation, although none was seriously hurt. Several lorry drivers described how they choked in the smoke and were convinced that they were going to die.

Last night, there were still fears that poisonous gases had not been completely cleared, further delaying repair work, although the undamaged part of the train had been taken out at Folkestone.

The fire started near the back of the 700m-long 8.45 train from Calais to Folkestone on Monday night. The cause is as yet unknown, although investigators are concentrating on a lorry thought to have been carrying polystyrene. "It seems like spontaneous combustion," one source close to Eurotunnel said.

On the face of it, the procedures worked well. All 34 passengers and crew were safely evacuated within 70 minutes, inside the 90-minute target set by the safety commission.

However, it is unclear why the train was stopped rather than the normal procedure followed of continuing to the terminal. Eurotunnel suggested this was done deliberately after discussion between the chef de train and the control centre in Folkestone, but Bill Dix, the managing director of Eurotunnel, refused to elaborate on why the train had stopped.

It is also not known why the second-best option - to disconnect the freight wagons, and leave just the locomotive and the club car with all the passengers to go through to Folkestone - was not taken.

There are three separate inquiries underway into the causes of the fire and the safety implications for the future running of the tunnel.

Inside the tunnel, there is a sad scene of damage which Eurotunnel's bosses must have hoped they would never see. The fire brought down lumps of concrete from the ceiling, destroyed a portion of the line, buckling the rails, and ruined trackside equipment, particularly the communications gear which will be very difficult to re-establish. Fifteen lorries were destroyed and five wagons badly damaged. However, engineering experts say that the structure itself is very robust and unlikely to have been damaged.

The financial damage is going to be very serious. The Eurotunnel president, Patrick Ponsolle, conceded that while insurers will pay for most of the physical damage, the loss of public confidence could take longer to restore, however well the safety procedures worked. "This was a serious incident but it has enabled us to show the quality of our safety procedures. We believe that it is through this incident that our number one priority, the safety of passengers, has been fully demonstrated."

While no one died, it will have reinforced people's often irrational fears of the tunnel and many may choose the ferries as a result.

In the short term, there is the possibility that the fire will undermine the current negotiations by Eurotunnel to reschedule the project's pounds 8.7bn debt, especially as the banks may feel that future revenue will suffer so badly that efforts to save the company are futile. Eurotunnel was already expecting to lose pounds 700m this year and further losses can be expected, as optimistic predictions of revenues of pounds 490m will be reduced. The stock market reacted predictably, marking down Eurotunnel while P&O shares prospered.

An inquiry by the Inter-Governmental Commission has been launched and Sir George Young, Secretary of State for Transport, promised in Parliament yesterday that its findings would be made public.

Eurotunnel admits things will never be the same again. John Noulton, public affairs director, said: "Inquiries like this usually lead to changes."

And there is no doubt that these will cost money, placing further stress on the near-bankrupt company. Doubts were already raised yesterday in Parliament by Gwyneth Dunwoody, a Labour member of the Commons transport committee, over the safety of the freight shuttles which have lattice- work sides open to the air. If Eurotunnel were ordered to replace them following the inquiry, it would undoubtedly cause Eurotunnel's bankruptcy.