pounds 16bn of rail investment at risk in planning row

RAILTRACK HAS warned that pounds 16bn of investment needed to revitalise the railways will be jeopardised if it loses a test case on whether it needs planning permission for major work.

John Prescott, Deputy Prime Minister and Transport supremo, will have to take a decision that could put the brakes on a range of investment schemes. There could be implications for other industries such as gas, electricity and water, according to one legalexpert.

Two residents have won the right to appeal against Railtrack's decision to start work on the pounds 3bn upgrade of the London-Glasgow West Coast line without going through a long planning process.

Residents of Primrose Hill, in London, are furious that Railtrack has avoided the need to assess the environmental impact of the work. They say it will cause pollution and noise and release asbestos and vermin.

Railtrack said that if Mr Prescott decided against it the West Coast project would be delayed, as it would have to apply for permission to every council along the line. It would jeopardise projects such as Thameslink 2000, the upgrade of the East Coast line and the Great Western electrification.

A spokeswoman said its legal advice showed the work did not need permission, as it had "permitted development rights". But there would be serious implications if it lost. "Primrose Hill is the test case and if that goes against us we would consider how to progress with work on the railway. It would slow up the work, because if we had to apply for permission every time we wanted to do maintenance work it would slow down investment spent on the railway."

Mr Prescott faces a dilemma: as Transport Secretary he wants to revive rail travel, but as Environment Secretary he has to oversee the fair running of the planning process. Helen Bryan, head of a residents' association, said: "We are concerned John Prescott will be sitting as judge and jury on a matter integral to his transport policy."

An expert in planning law,Michael Purdue, of London's City University, said a ruling against Railtrack could have implications for other utilities and industries, if Railtrack's permitted development rights were interpreted narrowly by either Mr Prescott or a court.

Railtrack faces a separate threat over its use of railway land on the edge of Oxford as a stockpile. Residents, backed by MPs, say work at Hinksey Sidings is causing unacceptable noise, vibrations, dust and fumes. Oxfordshire County Council has issued a direction which, if confirmed by Mr Prescott, would force Railtrack to apply for planning permission. If it was turned down it could claim compensation from the council. Chris Cousins, chief planning officer, said: "The issue that several people have raised is whether it is right that a private company which is accountable to its shareholders should take advantage of rights that were given to nationalised industries that were accountable to Parliament."