Railtrack is expected to take the lion's share of the blame for the 1999 Paddington disaster in the Cullen report due to be published next week.
Thames Trains, which was recently granted another rail franchise in southern England, will also come under fire for its grossly inadequate system of instructing drivers.
The findings will raise the prospect of manslaughter proceedings against senior executives at the companies, especially those at Railtrack who failed to take action over the signalling system outside the west London station despite repeated warnings.
The Director of Public Prosecutions is still considering evidence submitted by British Transport Police, and Railtrack could separately face unlimited fines for breaches of health and safety law.
The Cullen report will confirm that the immediate cause of the tragedy, in which 31 people were killed, was the fact that Michael Hodder, the driver of a Thames commuter train on its way out of Paddington, passed a red light. His train then smashed virtually head-on into an incoming Great Western express which exploded in a ball of fire.
The signal passed by Mr Hodder, SN109, was partly obscured by overhead equipment and difficult to see in direct sunlight. It had been passed at danger at least eight times in the six years before the crash. A series of committees set up to investigate the signalling system outside Paddington, which is one of the most complicated in the world, failed to take action to make it safer.
The inquiry heard evidence that Alison Forster, then operations and safety director at First Great Western, had written three times to Railtrack before the crash to demand action over signal 109, asking "as a matter of urgency what action you intend to take".
The signal was known as one of the most dangerous on the network and one of a series outside Paddington which failed to comply with regulations. Successive Conservative and Labour governments will also be criticised in the report for dragging their heels over safety systems. In a separate report out last month Lord Cullen, together with Professor John Uff, urged the industry to install the most sophisticated Automatic Train Protection equipment as a matter of priority. The 31 deaths at Paddington would have been prevented if the system had been in use at the time.
The savage criticism of Railtrack contained in the document prepared by Lord Cullen will further undermine the image of a company already at rock-bottom. Shares in Railtrack yesterday slumped another 9 per cent to a new low of 298p.
Gerald Corbett, who was chief executive of Railtrack at the time of the disaster, has since resigned, but Lord Cullen's report will still have a massive impact.
The report will be published in the wake of figures which call into question the effectiveness of safety measures introduced since the 1999 Paddington crash. The statistics show that the number of serious incidents involving trains passing red lights has risen sharply. The total of 22 "severe" incidents was the highest May figure for six years, according to the Health and Safety Executive.
The overall tally of 56 was also the highest since the Paddington crash. Fifteen of last month's incidents involved trains running 200 yards past a red signal. Mr Hodder drove his train more than 700 yards past SN109.Reuse content