Railtrack rescue package sealed

A DEAL to sell off Railtrack to its not-for-profit successor, Network Rail, has been clinched and is due to be announced on Friday. Agreement has been reached with Railtrack Group, the failed network operator's parent, over a compensation package to shareholders of around 250p.

This will be the first big move by Transport Secretary Alistair Darling since he took over from Stephen Byers, who forced Railtrack into administration in October. The ensuing row eventually led to Byers' resignation. It will be seen as a fresh start.

One insider said: 'Network Rail has entered into a binding legal agreement with Railtrack Group. It's taken a tremendous effort, but it's there. It is always possible that a last-minute hitch could cause the announcement to slip a day or two. But Friday is the big day everyone is working towards.' The compensation is partly cash and partly the proceeds from assets held by the still-solvent Railtrack parent company.

On Wednesday, Network Rail chairman Ian McAllister said the bridging financing of £9bn to release Railtrack from administration would be refinanced through the capital markets. He said: 'We promise that profits will not be put before safety.'

Darling said the post of Rail Regulator would be scrapped and replaced by an independent board of about six people.