Railtrack, the monopoly track and signalling company, said that it had embarked on the "biggest investment since the days of Brunel".
It said that the money would also be used to tackle bottle-necks on the network to cope with a predicted 30 per cent surge in passenger numbers over the next decade - twice the level it had forecast a year ago.
But critics said that the scheme was a "mirage" that contained only pounds 1.4bn of firm investment commitments.
Plans include the pounds 1bn upgrade of the East Coast main line from London to Edinburgh, which will cut journey times by 28 minutes to three hours and 30 minutes, and provide capacity for twice as many trains.
Railtrack wants to upgrade Great Western lines and cut 37 minutes off the journey to Penzance and 10 minutes off the journey to Swansea. But this scheme needs outside funding.
The company has committed itself to a new pounds 100m scheme to link Heathrow airport with southern England, and a pounds 130m modernisation of the line from London Liverpool Street to Stansted airport. Railtrack is already committed to the pounds 3bn upgrade of the West Coast main line to Scotland, cutting journey times to Glasgow by one hour 17 minutes to four hours.
Gerald Corbett, the Railtrack chief executive, said: "This pounds 27bn programme is the largest upgrade of the infrastructure since the railways were built. Delivering it is a massive challenge, which can only be met through an effective partnership between the public and the private sector."
Railtrack also pledged to improve passenger train punctuality by 7.5 per cent in 1999-2000, by 5 per cent in 2000-2001, and by 2.5 per cent each year after that. But Mr Corbett admitted that Railtrack would miss this year's 7.5 per cent target by up to 4 percentage points, laying the company open to fines from the Rail Regulator.
"We recognise that there is still a great deal to be done. While we have made considerable progress in many areas, we know that too frequently the experience of passengers falls short of what they have a right to expect," he said.
The pressure group Save Our Railways described the document as "a mirage". It said that Railtrack had only committed to pounds 1.4bn over 10 years, compared with itspounds 350m-a-year profits.
It said that pounds 16bn was being spent to maintain the network: pounds 1.8bn on plans set out a year ago, and pounds 6.3bn on schemes requiring outside partners.
"We welcome the commitment to new rail schemes, but we are deeply frustrated and disappointed that, overall, the much-trumpeted pounds 27bn investment programme turns out to be a mirage," said Jonathan Bray, a spokesman.
James Gordon, director general of the Association of Train Operating Companies, said: "We very much hope that Railtrack's spending produces some immediate benefits as well as long-term improvements to the network."
Railtrack also unveiled a pounds 350m investment plan for freight, based on an annual growth forecast of 15 per cent over 10 years.
The centrepiece would be the creation of a third route to Scotland by the revival of the pre-war Midland Railway from Glasgow to London via Settle, Carlisle and Leeds.
Railtrack also wants to open four lines axed by Dr Beeching in the 1960s, although it said there were not firm plans. This include Wednesbury to Stourbridge for passengers and Stirling to Kincardine, Lichfield to Walsall, and Stratford to Cheltenham for freight.
Chris Bolt, the Rail Regulator, who oversees Railtrack's investment, said that consultants would review the company's costings. But sources said that Tom Winsor, the new regulator who starts in July, would take a more hard-line approach.
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