The government will take more direct control of the national rail system as part of a major shake-up.
Local bodies will get more power
The Strategic Rail Authority (SRA) set up four years ago is being scrapped and most of its powers are moving to Transport Secretary Alistair Darling.
Changes outlined in a White Paper stop short of renationalisation, something the rail unions have campaigned for.
There will be tighter government control, with Network Rail assuming responsibility for the network.
Some of the Mr Darling's plans will need new legislation and a bill will be introduced as soon as possible.
Mr Darling said changes to the rail structure would steer it away from moments of confrontation.
He told the Commons: "The new structure will bring the operation of track and train closer together.
"Too often under the present system companies have been able to pass the buck for poor performance.
"So in future, Network Rail will be responsible for ensuring that the network delivers a reliable service through an agreement with the government."
The reorganisation would "put the railways on a stable long-term footing and tackle the remaining flaws left from privatisation".
The main points of the White Paper are:
- Strategic Rail Authority to be abolished after four years
- Most powers will be with transport secretary
- Network rail takes full responsibility for maintaining a reliable service
- Safety function goes from HSE to Office of Rail Regulation
- Number of franchises reduced
- Considerable devolved powers to Scotland over rail
- More powers for Wales and English regional bodies
- Mayor gets responsibility for all trains in Greater London
- Community railway lines will be put on a "better financial footing"
Under the new proposals, Network Rail would be responsible for timetabling, use of routes and enforcing the punctuality of train companies.
Responsibility for safety on the railways would move from the Health and Safety Commission's (HSC) executive arm - the Health and Safety Executive (HSE) - to the Office of Rail Regulation.
HSC chairman Bill Callaghan said: "The commission is naturally disappointed with this decision. It is our firm belief safety regulation should be independent of its industry and any regulator should have teeth to be able to enforce measures where necessary."
Tim Yeo, Conservative transport spokesman, said "shifting responsibilities around Whitehall, replacing one set of bureaucrats with another" would not make the trains more reliable.
The Liberal Democrats said they had long argued for a simpler and clearer structure, but said the railways now needed a long-term vision.
The SRA released a statement saying despite its abolition it remained "proud of its leadership role in rehabilitating Britain's railway" .
SRA chairman Richard Bowker, who will stand down in September, said the body had brought "stability, clarity and certainty."
The railway sector has been dogged by upheaval since the first steps to privatisation over ten years ago.
In 1993 the Tories replaced British Rail with privatised regional franchises, to run services, and Railtrack, to maintain the railway infrastructure.
After Labour came to power in 1997, the company was put into administration and was replaced by not-for-profit Network Rail in 2002.
The government also set up the Strategic Rail Authority four years ago to promote rail use and strategically develop the rail network.