Network Rail is to get an extra £7bn of public money over the next five years to improve the UK's railways.
Network Rail runs the UK's rail infrastructure
However, the £22.2bn it is to be given by Rail Regulator Tom Winsor is £2bn less than it had been hoping for to improve track, signals and stations.
The difference could mean some delays to improvement work on the West Coast main line between London and Glasgow.
Yet the £22.2bn figure is more than the government had allocated the railways in its own 10-year transport plan.
Mr Winsor said he wanted to see punctuality and reliability improve on the rail network as a result of the additional funding.
He said: "In return for this increased funding, which is substantially less than the company had originally requested, Network Rail must improve the punctuality and reliability of railway services."
Run on a not-for-profit basis, Network Rail (NR) operates the UK's track and signals infrastructure, and is the successor to failed private company Railtrack.
The latest funding package starts from April 2004.
For the West Coast main line NR is being given £640m less than it had originally budgeted.
Yet Mr Winsor said NR should be able to ensure that maintenance work planned for 2004 and 2005 still goes ahead.
Replaced Railtrack in 2002
Responsible for all railway infrastructure
Does not run any trains
Employs 13,000 people
And certain targets, such as reducing the journey time between Manchester and London by September 2004, must be achieved.
For West Coast main line work after 2005, Mr Winsor appeared to be more flexible, suggesting that some schemes could be delayed, thus saving as much as 22% of the costs.
He said that would be achieved "by extending the timescale for delivering certain other elements of the project which would provide a greater certainty of those outputs being delivered on time and on budget".
Looking towards NR's overall operations, Mr Winsor wants to see a reduction in the delays it causes the passenger train companies, by 8.1% for 2005-2006, followed by 6.2%, 7.5%, and 7.1% in subsequent years.
Mr Winsor told BBC Radio Four's Today programme: "The performance targets I have established for the company are sound targets and they are achievable.
"I believe the company now has the basis to set about and achieve the necessary measures of delivery to passengers."
A spokesman for Network Rail said it welcomed Mr Winsor's announcement.
"The settlement provides NR with secure, predictable revenues and puts
railway finances on a stable, long-term footing," he said.
"Mr Winsor's conclusions are based on extremely challenging targets for
improvements in efficiency and performance."
"But NR has always recognised the need for such improvements," he added.