The remarkable conclusion was pushed by the 11 Labour members of the committee - and accepted reluctantly by the four Tory MPs on the transport select committee.
Nationalisation of Railtrack, the company that owns the nation's stations and tracks, remains an aim for many of the Labour faithful.
Taking stake in the company was also proposed when senior executives met ministers to discuss the privatisation of the Tube. The idea was in return for a shareholding, Railtrack would inject capital into the network - but the scheme was rejected.
The report also proposed a radical reform of the way the privatised railways are regulated to give passengers more power, better services and safer trains.
It concluded that the sell-off of the old nationalised system was a disappointment. "It is clear that the privatised passenger railway has not yet performed significantly better than British Rail," the committee said.
"We are disappointed that the train operators' performance has shown no general improvement over the last year, and on half of routes has actually declined.
A safety authority should be set up to oversee the scrapping of old, slam-door trains and the introduction of new train safety measures, said the committee. Passenger watchdog groups should be made much more powerful and have at least one representative on the Government's proposed Strategic Rail Authority.
But Eric Pickles, the Tory leader on the committee, preferred to concentrate on the "successes" of private operators adding: "This has seen a rise in passenger numbers."Reuse content