Network Rail told: Improve or face competition

The rail regulator has warned Network Rail that it will lose its monopoly if it does not put an end to trains running late and engineering works taking longer than scheduled.

Bill Emery, chief executive of the Office of Rail Regulation, said Network Rail had one last chance to improve. His warning comes two days before the ORR is due to reveal how much income Network Rail will receive between 2009 and

2014. It is expected NR will be given £1billion less than it claims it needs - a 25 per cent cut.

NR has made progress in reducing costs but has failed to meet its own targets for cutting delays.

Mr Emery said: "If they don't rise to these challenges [of improving punctuality and efficiency], then there is a real, legitimate question as to whether the structure is right."

He also criticised the company's move to protect its monopoly by refusing a proposal by Merseyside to combine track and rail operations which would save £30million a year.

Mr Emery said: "It would have tested whether working together would lead to better performance and lower costs."