There are as many as six to eight cable theft incidents on the railways a day, MPs were told today.
Offenders have included Network Rail (NR) staff, NR's operational services director Dyan Crowther told the House of Commons Transport Committee.
Thieves sometimes targeted periods when signals were being replaced when it was "almost like providing sweets in a sweetshop", Ms Crowther said.
Cable theft, which affects signalling and can lead to long delays to trains, was "very random" and made the industry's response to events "quite difficult", she added.
Cable theft is costing the UK economy about £16 million to £20 million a year, the Association of Train Operating Companies chief executive Michael Roberts said.
It is estimated that cable theft is deterring around half a million passengers a year from using the railways,
The committee hearing came on a day when a suspected cable theft caused travel chaos for rail passengers in East Anglia, with some travellers delayed for up to two hours.
Ms Crowther said the cable theft problem began in north east England and had spread. The typical thief was "an opportunist and someone who would do it on a random basis", she said.
She said that resignalling times were made public on NR's website and there had been evidence of "insider knowledge" leading to cable theft incidents.
She added: "There have been arrests within NR."
Asked what the scale of these were, she replied: "Not huge. It's not something we are getting every day."
British Transport Police (BTP) Deputy Chief Constable Paul Crowther told the committee that new legislation - to replace existing "Steptoe and Son" regulations - was needed to control metal theft.
He said metal theft was "market-driven".
"As the price of metal goes up, the number of thefts goes up.
"It's as if the criminals are looking at the markets themselves."
Mr Crowther said most of the stolen cable went to scrap metal dealers and that some dealers "turned a blind eye" and were "engaged in criminal activity themselves".
He went on: "We have Steptoe and Son-style legislation at the moment and this has not kept pace with current methods.
"When you go to scrap metal dealers you give your name and address and there are no means of knowing if the information is true."
Mr Crowther told the MPs: "There is a major fault in the current legislation (the Scrap Metal Dealers Act).
"The risk-to-reward balance is very much in favour of the criminal. The average fine for scrap metal offences in 2010 was £379."
He added that around 80% of those caught stealing cable from the railways had previous convictions.
"Cable theft on the railways is seen as a low-risk, high-return activity, said Mr Crowther.
He added that people were not asking enough questions about the stuff they were receiving.
He went on: "Whole bus stops are being stolen, 30 manholes at a time are being taken from streets. There have been thefts from people's porches. People must know these things are not legitimate."
Ian Hetherington, director-general of the British Metals Recycling Association, told the committee that the Environment Agency estimated there were around 170 illegal scrap metal sites.
He went on: "This is probably the tip of the iceberg. There are about 900 permitted sites and there could be as many illegal sites as legal ones."
Mr Hetherington agreed that existing legislation should be tightened.