Rail passengers face higher fares under reforms which would see ticket offices closed and reductions in on-board staff, according to leaked documents.
A Government study into improving efficiency and increasing capacity on the railways will find fare structures are too complex, illogical, over-subsidised and do not effectively manage peak demand, the documents show.
It will say the railways are subject to too much state involvement and a growth in services has not been matched by greater efficiencies. The documents say costs are a "major problem" and need to be cut by 35 per cent to match Europe. There are plans to cut staff and to decentralise or break up Network Rail.
The unions have threatened industrial action over the plans, which were drawn up by Sir Roy McNulty, the former chairman of the Civil Aviation Authority, under the Rail Value for Money review. They were presented to industry leaders at a workshop last month. The final report will be presented to ministers next month. Sir Roy said: "Some fares [are] well below the level which [the] passenger would pay." His report will urge ministers to review fares policy and allow train operators to "take a more commercial approach" to ticket prices by lifting caps on fares and removing saver tickets from long-distance services. Train operators will also be encouraged to make more money from car parking.
Staffing on trains and ticket offices could be "significantly reduced" using modern technology. British railway workers are better paid and less productive than their European counterparts and drivers' contracts should be reviewed, the presentation said.
A Rail Delivery Group will be set up to cut costs and make better use of existing capacity. It will call for train-operating companies to have longer franchises of up to 15 years.
The plans put the Government on collision course with rail unions, with whom poor relations were identified as a "barrier to efficiency" by the study.
Bob Crow, general secretary of the RMT, said the largest rail union would "fight this attack on jobs, safety and service quality every step of the way".