One out of every five trains is reportedly late
More than half a million rail commuters are reportedly facing substantial fare increases for the first time in almost a decade.
The Strategic Rail Authority (SRA), which is struggling to cover the soaring cost of running the network, is to abolish the price cap on season
tickets, according to The Times.
A study indicates the price cap, which keeps season ticket price rises at least 1% below the rate of inflation, will cause dangerous overcrowding.
And rail consultant AEA Technology concludes fares must rise by 3% above inflation every year for 20 years to prevent a serious increase in overcrowding in south-east England, the newspaper says.
The price cap applies to saver and season tickets.
But inter-city operators have already boosted their revenues by introducing new time restrictions on when the tickets can be used, according to the paper.
SRA spokesman Ceri Evans told BBC News Online: "No final decisions on fares have yet been made and some more work is still to be done before we announce our decision.
"The price-capping for London commuters is one area under close investigation."
At their current level fares simply could not pay for necessary improvements to the service, he added.
But another rail industry source said the SRA had "already decided to come out with a new fares policy" and was just a question of "by how much fares will go up".
Prime minister Tony Blair's spokesman said a decision would be made within two months.
The government was mindful of the fact that although there had been some gradual improvement in the performance of the railways, the standard of service was still not at the level passengers or the government would like, he added.
Publishing its consultation on a future fares policy in July 2002, the SRA said it would "need to make some tough decisions".
And on Thursday director of strategic planning Jim Steer told The Times the consultation had "found a general view that it is highly questionable to continually reduce fares in real terms" even among "the people you might expect would most protest".
"It goes against the grain for the taxpayer to pay an increasing proportion of the cost of commuter services," he is quoted as saying in the paper.
"People should not be getting everything funded by the state."
Just 6% of the workforce commute by rail and one out of every two people never take the train.
The £3.5 billion paid in fares last year barely covered half the cost of running the railway.
Network Rail has said it needs £11bn extra to maintain the railways up to 2006, equivalent to £440 for every household.
But the government's not-for-profit replacement for Railtrack added "sustained improvements will take several years".
And although one out of every five trains still arrives late, the revised price cap will be imposed in January, according to the paper.
Rail Passengers Council chairman Stewart Francis said commuters should pay their fair share but only if "the railways are delivering a decent service, which they are
not at the moment".
"To put up fares by above the level of inflation at the moment would be a dumb move," he said.
Raising fares to reduce overcrowding is "absolutely perverse", he added.
"If many people in south-east England suddenly switched from rail, the roads would be swamped with cars," Mr Francis told BBC News.