Ministers attacked over Railtrack

Byers has been referred to the Standards Committee

Ministers' handling of the collapse of Railtrack has been described as "an absolute scandal" by the Conservatives.

Senior Tory Alan Duncan said the issue went to the heart of Labour's conduct in government and accused Chancellor Gordon Brown of playing a key role.

Ex-Transport Secretary Stephen Byers already faces a Standards and Privileges Committee probe over whether he lied to Parliament over the issue.

Both Mr Byers and the government have always denied any wrongdoing.

'Contempt'

Railtrack went into administration in October 2001 after the government moved to withdraw funding in the aftermath of the fatal Hatfield crash in 2000.

This was not about reacting to the company's insolvency - it was about cutting the company's financial lifeline Alan Duncan

But in a motion debated in the Commons, the Tories questioned "the government's propriety in the method by which they sought" to put Railtrack into administration.

They condemned ministers "attempted intimidation of the rail regulator" and abhorred "their cavalier and dismissive contempt for Railtrack shareholders".

They also criticised the conduct of one of Mr Brown's special advisors "for usurping the proper role of ministers" and claimed the government's approach to the whole project "was dictated by the chancellor".

Shadow transport secretary Mr Duncan told MPs that papers obtained by his party showed that up to the day the government went to court in October 2001 it "was worried about not having adequate evidence of Railtrack's insolvency".

'Misused powers'

"The administration power of the secretary of state was given to him by Parliament to enable him to react to the insolvency of a railway company," he said.

But the evidence was "overwhelming" that Mr Byers "misused his powers to try to create that insolvency", said Mr Duncan.

Many of the shareholders were small investors - we are not talking about big business or fat cats in this case Alan Duncan

"We see the railway administration is being used as a means to an end, the end being seizing Railtrack's assets and taking out a FTSE 100 company by the backdoor.

"This was not about reacting to the company's insolvency - it was about cutting the company's financial lifeline."

Mr Duncan said the government had "utter contempt" for Railtrack shareholders - most of them employees of the company.

"Many of the shareholders were small investors - we are not talking about big business or fat cats in this case," he said.

He said the "whole sorry saga" had undermined investor confidence in government projects.

"It was the processes of government the by-passing of Parliament ... that precipitated this lost of trust," he said.

But Mr Byers told MPs: "There is no chicanery here."

He added: "I'm confident that when I took that decision in the autumn of 2001 to say no more extra money to Railtrack, to put the interests of the travelling public first, I did that after proper debate and deliberation in government, I did it with the powers that I had then as Secretary of State for Transport and I'm absolutely confident that it was the right decision to take."

The Tory motion was defeated by a majority of 169.

A government amendment, welcoming the court judgment and praising its own efforts to repair the effects of a "botched privatisation" was approved by a majority of 147.