Downing Street pushes for a 'no strike' rail deal

Government calls for train companies to use arbitration rather than national pay negotiations to end industrial action

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Rushes, crushes and smoke in a train travellers' week

Leading article: The demand for national pay rates is a lurch back to the delusions of the past

The Government has called for train companies and unions to prevent future disruption on the rail network by agreeing, in effect, to a "no-strike" deal.

Downing Street denied legislation was planned that would impose binding arbitration for the railways but the Government's Strategic Rail Authority (SRA) could encourage companies to introduce it.

The Prime Minister's spokesman said: "We would say that arbitration is one of the most important means of resolving the issues. We believe there should be arbitration – whether binding or non-binding, that's another issue."

Number 10 insisted the Government would not impose an arbitration agreement on the privately-run rail industry, saying it would have to be agreed by management and unions.

The transport minister, John Spellar, is a known supporter of binding arbitration from his days as head of research at the now-defunct electricians' union, which championed the technique in the Eighties and Nineties. George Muir, director general of the Association of Train Operating Companies, registered his scepticism about the process. He said it could be inimical to the kind of industrial relations partnerships that companies were attempting to achieve at local level.

Most unions reacted angrily to Downing Street's call, warning that they would not surrender their right to strike. A spokeswoman for the RMT, the biggest rail union, said: "We believe in the negotiating process. It is part of the fundamental rights of workers to withdraw their labour."

Last night, the conciliation service, Acas, offered to arbitrate in the dispute at South West Trains, which has already caused two 48-hour strikes and is due to cause another two-day stoppage on 24 and 25 January. Richard Rosser, the general secretary of the white-collar rail union TSSA and a New Labour loyalist, urged both parties to accept the offer.

Downing Street reacted coolly to calls by rail unions for a return to national pay bargaining. Mr Blair's spokesman said it would be a "distraction" from the main issue – what to do when dialogue broke down – and would not prevent a national rail strike.

Mr Spellar believes there should be some form of "co- ordination" between employers but he registered no enthusiasm for the return of national negotiations covering the 400,000 employees who work for train operators. "It is not clear that full national pay bargaining is the way to go," he said.

Most train operators opposed the return of national wage negotiations, although Great North Eastern Railways said there might be scope for an accord over productivity.

Mr Muir, of the Association of Train Operating Companies, said of central pay bargaining: "Out of the frying pan into the fire. Instead of local strikes, the threat would be national strikes – as we saw in the past. Pay differentials are simply a part of life, and national bargaining would not get rid of them."

He said the old national deals at British Rail "hid" differentials that re-emerged in a maze of local variations.

The Government is aiming to call a halt to the spread of industrial unrest with "on-train" staff on £10,000 a year attempting to catch up train drivers on inter-city services who can earn up to £40,000.

The pay differentials between drivers, who are in short supply, and other employees are at the heart of disputes at South West Trains, Arriva Northern and Connex South Eastern.

On Monday, Stephen Byers, the embattled Transport Secretary, will try to launch a fightback by making a Commons statement about a long-awaited new strategic plan for the railways industry that was drawn up by the SRA.

It will include short-term action to reduce the number of late and cancelled trains and measures to improve conditions for passengers, including new train carriages. But Government sources admitted the £4.5bn of additional funding in the £33bn, 10-year programme was not new and was announced last year. Senior figures at the authority are concerned that the document, which is couched in general terms, will amount to little more than a "damp squib".