The federal crime office in Wiesbaden said one of the men was arrested as he was trying to collect blackmail money at a motorway rest area near the southern city of Munich.

"It is with great relief that I can inform you that the alleged blackmailer who kept us holding our breath in recent days was arrested last night," said Johannes Ludewig, the chief executive of Deutsche Bahn said in a statement.

Suspect confesses

German radio has reported that one of the suspects arrested had confessed to involvement in three acts of sabotage on the German rail network between 8 and 16 of December.

Bomb fears: Police search Frankfurt station

He is said to have threatened to allow bombs planted in train stations in Frankfurt, Nuremberg and Hamburg to explode. Those stations were temporarily closed and searched, but no bombs were found.

The threats of sabotage, which were delivered under the name of Friends of the Railway, sparked a major security operation causing widespread disruption to railway services in major cities.

Air force reconnaissance planes, helicopters and 400 extra border police were called out to patrol rail lines.

Series of accidents

Authorities said it was possible that at least one of the suspects was a former railway worker with a grudge against the company.

Police say that the group caused three recent train accidents in the northeast of the country, and precautions against the extortionists are being stepped up.

In the latest acts of vandalism, bolts were loosened on railway tracks near Anklam, 160km (100 miles) north of Berlin causing a cargo train to be derailed. No-one was hurt. Last weekend another train in Berlin narrowly escaped derailment when it went over concrete blocks placed on the line.