The BBC's Andrew Sinclair: No formal training for construction gang

The fine, imposed under the Health and Safety at Work Act, is the third large penalty on the company in five weeks.

The incident involved the derailment of a freight train at Rivenhall, between Witham and Kelvedon in Essex, on 23 September 1997.

Balfour Beatty was repairing track which had drainage problems when the train's eight vehicles were derailed.

Four carriages were wrecked after going down an embankment. Signalling and overhead mast equipment were also damaged.

Serious safety risk

Both lines were blocked for five days and the damage cost £1m to repair.

Judge Watling QC, at Chelmsford Crown Court, said the Freightliner train derailed "because a gang of men, employed by the defendants, who were working on the track failed to provide themselves with essential pieces of equipment".

He added that they were "not properly monitored or supervised, with the result that a serious risk to health and safety was created which culminated in the derailment".

The judge said that it was "only by the grace of God" that a passenger train had not been passing at the time.

The fine was the highest financial penalty following a railway accident.

Vic Coleman, the Health and Safety Executive's chief inspector of railways, said: "This prosecution and the size of the fine send a strong safety message to the railway industry, particularly railway maintenance contractors."

On 15 February this year, Balfour Beatty was fined £1.2m following the 1994 collapse of the Heathrow Express rail tunnel at Heathrow airport.

An Austrian engineering consultancy was also fined £500,000.