Cash crisis threat to rail plan

A cash crisis is threatening Labour's 10-year plan to improve the ailing rail network.

It is now clear that of the £77 billion already pledged is nowhere near enough and it is believed that some of the money from the taxpayer and private sector has been counted twice.

The new crisis comes as Chancellor Gordon Brown prepares his spending review.

Pressure today mounted that while the Chancellor will want to direct much of the money towards health and education, the continuing problems with the railways will force him to dig deeper into Treasury coffers.

It also put even more pressure on Stephen Byers, the Transport Secretary, who claimed last month that the investment-plan would create a railway "fit for the 21st century and the country with the fourth largest economy in the world".

The £77.5 billion consists of £33.5 billion from the public sector and £34 billion of private money.

But the continuing debacle with the railways has frightened many of the private sector lenders.

Sir Alastair Morton, the former chief of the Strategic Rail Authority, made clear when he left the job just before Christmas that the private sector "in the present mood" would not want to risk investing in the railways.

And the grim economic climate has not changed since then.