About six Ulster Unionist MPs - whose votes could prove crucial to Mr Major's plans for delaying a general election until next year - voted with the Government to defeat Labour. The Government's majority in the Commons is down to one following the Staffordshire South-east by-election last week.
"It means we could now survive until the Budget, and after that, we could get through to a general election next year," one senior Tory MP said after the vote.
Labour did not pull out all the stops to defeat the Government. At least three Labour MPs who are suffering long-term serious illnesses were not called in to vote by the Labour whips, and a Commons select committee was allowed to go on a foreign trip in spite of the vote.
Tory MPs believe that Labour could be keeping its powder dry for other votes in the coming months, if it can secure the support of the Ulster Unionists.
One of the turning points for the Government came when the Ulster Unionists were sent a fax by the Northern Ireland Office assuring them that rail services in Ulster would be improved.
"We came to the view that getting private finance into the railways was the best way to improve services," one Ulster Unionist said.
The Prime Minister missed the vote, as he was on a visit to Prague before leaving for Kiev today, but he was paired. The Ulster Unionists have tabled a reasoned amendment to the Bill to be debated in the Commons today for elections in Northern Ireland leading to all-party talks, but after last night's vote, ministers were hoping that the nine Ulster Unionists were satisfied with the Government's Northern Ireland strategy.
The Government defeated the Labour attack on the privatisation of Railtrack by 306 votes to 287. Sir George Young, the Secretary of State for Transport, rejected claims by Labour that a leaked letter from John Welsby, the chairman of British Rail, showed the flotation prospectus was misleading.
He said that the concerns raised by Mr Welsby in the letter, leaked to the Independent, had been taken into account. He said Railtrack believed it to be accurate.
Clare Short, Labour's transport spokeswoman, in a last-ditch attempt to warn potential investors off the sale, warned last night that a Labour government would cut the expected rate of return on the shares. She also said that there could be a claw-back on "substantially all" the land-disposal programme by Railtrack under changes to the Government's legislation to privatise British Rail.
Railtrack could be stopped from selling off land and office developments at stations under restrictions on the sale of its assets by a Labour government, she said.
Ms Short said that the disposal of assets by Railtrack to produce a quick cash return for shareholders after privatisation could be stopped by a simple amendment to the 1993 Railways Act, which be- gan the privatisation process.
The flotation prospectus, which was published on Monday, shows that Railtrack is planning to sell property worth pounds 250m over the next five years. Its income this year from sales is expected to amount to pounds 11m with the sale of the lease of the Great Eastern Hotel, but a spokesman said last night that most of the property assets were hived off to the British Rail board when Railtrack was created, including valuable land for office development at King's Cross in central London.
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