Stephen Byers, the Secretary of State for Transport, was forced to fend off fresh allegations last night that he had misled Parliament over his decision to put Railtrack into administration.
Mr Byers admitted that he had told Paddington rail crash survivors a month before his decision that he had plans to create a new not-for-profit company to replace the privatised firm.
The meeting took place on 12 September, weeks before he later told MPs in the Commons that his decision had not been made until 5 October. Pam Warren, who was chairwoman of the survivors' group at the time, claimed Mr Byers was "chuckling and grinning" as he told the meeting that Railtrack "wouldn't be much trouble for much longer".
Last night, Railtrack shareholders said they were considering taking legal action over the claims and the Tories demanded that Mr Byers come to the Commons to make a statement.
Downing Street claimed on Wednesday that the Government disagreed with Mrs Warren's account, but in an interview with the BBC, Mr Byers said that the comments he had seen had been accurate.
Mr Byers told BBC Radio 4's PM programme yesterday: "It was very clear to me that we couldn't let Railtrack continue as it was and that's why we were working up two options.
"Either to provide more money – but tied very clearly to improvements of reliability and performance and safety– or to say no more money, go for railway administration and then perhaps to be replaced by a not-for-profit company."
Mr Byers admitted that he had discussed such options with the survivors' group and had already made up his mind that Railtrack was "not part of the solution" to the state of the railways.
"Those were some of the options that we were considering on 12 September, but importantly no decision [was taken] until 5 October. On 12 September, I didn't say we would definitely do this or that," he said.
"I had decided that Railtrack had become part of the problem not part of the solution and so what we were doing in September was working up these two options."
In her own interview with the BBC, Mrs Warren said that Mr Byers had told the group that he would be pleased to see a not-for-profit company replace Railtrack. He did not, however, use the word "administration".
"He actually said to us, watch out for around the 8th or 10th of October when you will have some news that will be very pleasing to you," she said.
In a House of Commons statement on 7 October, Mr Byers said he took the decision on 5 October, having made contingency plans on 28 September, a full fortnight after their meeting.
Mrs Warren said: "We were shocked, because we were sat there saying, well, we knew that this was going to happen so that's not true and we did wonder why he wasn't pressed harder at the time."
She said she had kept silent about this for so long because the survivors' group had had many meetings and agreed to keep them private. They had also hoped that Mr Byers was finally sorting out the safety issues they had campaigned on but "after Potter's Bar, we felt that the Government had broken their promise to us".
Usman Mahmood, who chairs the Railtrack Action Group representing 71,000 shareholders, said he was looking at the legal options.
Raising a point of order in the Commons, the shadow Transport Secretary, Theresa May, said Mr Byers should now to make a fresh statement to MPs to explain himself.
Thirty-one passengers were killed in the Paddington rail disaster in October 1999 when a commuter train passed a red signal into the path of an intercity train.
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