Prescott digs in on sale of Tube

JOHN PRESCOTT, the Deputy Prime Minister, has risked putting the "old" back into new Labour by guaranteeing that London Underground will remain "publicly controlled and publicly accountable".

The pledge was in a letter to former Tory MP Hugh Dykes, an opponent of rail privatisation. The phrase echoes words used by Labour in opposition. The commitment was dropped from the election manifesto, despite being approved by the party's membership.

Mr Prescott has taken an increasingly hard line with the private sector, perceived to be lining directors' pockets while providing a poor service. This week has seen the Deputy Prime Minister weighing in for the taxpayer after the National Audit Office criticised the handling of the sale of British Rail's rolling stock. Sold in 1996 for pounds 1.8bn, months later they were bought up for pounds 2.65bn, netting directors millions. Mr Prescott said: "The rolling-stock companies have been getting fat at the taxpayers' expense. It is completely unacceptable."

He also put paid to plans by FirstBus to buy up Great Western. Again, former British Rail directors stood to make millions despite providing a service where almost one in five trains is "officially" late. FirstBus yesterday met the franchising director, John O'Brien, who has taken "guidance" from the Deputy Prime Minister. This means any change in ownership will require tough new punctuality targets, investment on trains and lower fares.

Downing Street has also been impressed with Mr Prescott's crisis-management. When the consortium tasked to build the Channel Tunnel rail link failed to meet its passenger targets, its executives asked Mr Prescott for pounds 1.2bn in extra subsidy. Typically, he sent them packing. Officials at Mr Prescott's department are now looking at plans to get the high-speed link built - even with Eurostar being kept in public hands. He is unlikely to make a decision before July. "It is about letting private companies to accept more of the risk and less of taxpayers' money," said one source close to Mr Prescott.

A statement is due soon on the crumbling Underground, which is desperately short of cash. Most expect that its tunnels and track will be split into three companies and each one will be "let" to the private sector.