The proposal, thought to be the option favoured by Robert Horton, the abrasive Railtrack chairman, is contained in a confidential letter, drawn up last week by the company's legal department, and would cost nearly pounds 12m more than accepting the strikers' demands.
Railtrack management is considering copying the tactic used by President Reagan in the early Eighties when he dismissed striking air traffic controllers in the US - who were replaced by military staff. Without that option available Britain could face months of disruption while new staff were recruited.
Ministers have in the past set their face against sacking the signalling staff because of the legal complications and the difficulty of recruiting a new workforce. It is almost certain, however, that Mr Horton will have discussed his strategy with ministers.
Solicitors calculate a pounds 16.5m bill could result from industrial tribunal awards to strikers. This compares with the pounds 4.9m informal offer vetoed by the Government more than three months ago.
The letter, dated 24 August, from Andrew Litherland of Railtrack's legal department to solicitors Simmons & Simmons, suggests that Mr Horton favours instant dismissal rather the imposition of a contractual notice period. The company last night dismissed the sackings idea as 'wild speculation'. Jimmy Knapp, leader of the RMT transport union, estimates that Railtrack's year zero option could cost more than pounds 30m when the signalworkers' three- month notice period is included.
Mr Litherland's letter acknowledges concern in 'certain circles' - probably a reference to the Government - of the political and public relations effect of tribunal rulings in favour of dismissed strikers.
Under a section headed 'privileged and prepared for the purposes of legal advice', Mr Horton's favoured plan is set out in a day-by-day account. On day one, signalling staff would be invited to accept the new terms and conditions. On day eight, signallers on strike would be threatened with summary dismissal. Eight days later strikers would be sacked. Then it sets out likely events on day 16, a strike day: 'Large-scale acceptances of new terms and conditions . . . strike crumbles.' Mr Knapp said: 'If this document is authentic I am astounded that Railtrack is contemplating spending
pounds 16.5m on sacking signal workers when for a third of that sum they could resolve the dispute. Robert Horton is talking about negotiating, but behind the scenes he is plotting mass sackings which would destroy the rail system.'
A spokeswoman for Railtrack warned the Independent against reporting on the document which she said was 'privileged' and should not be published. 'Given the Independent's financial circumstances, you should bear that in mind,' she said.
She said the letter was simply solicitors discussing the options. It should not be taken that Mr Horton favoured any particular course of action. The reference to the chairman meant that he preferred one draft of an option rather than another.
Railtrack said that 53 per cent of the network was opened during the 48-hour strike which ended at noon yesterday.
Another 24-hour stoppage has been called by the RMT from midnight next Wednesday. The union's national executive committee will meet today to consider further industrial action for the week beginning 12 September.
RMT officials said that so far the strike had remained solid, and some officials argue that every time signal workers' resolve seems to be in question, the company 'does something foolish'.