Top Major aide in rail strike talks: Railtrack's pounds 7m HQ - Deal would cost pounds 4.8m

A SENIOR Downing Street official attended a meeting at Railtrack on the eve of yesterday's talks on the signal workers' dispute, adding to the row over the Government's role in the affair.

The row grew last night when union leaders accused Railtrack, the signal workers' employer, of adjourning the talks for 48 hours so that it could seek further government instructions. Vernon Ince, the chief RMT union negotiator, said that the delay until tomorrow night allowed Railtrack 'to call Number 10 and ask them what to do'. Union leaders added that the delay would leave them only 24 hours to avert a second one-day strike, due on Wednesday. Last Wednesday's strike brought almost the entire national rail network to a standstill.

It also emerged yesterday that the state-owned Railtrack company has spent more on refurbishing its London headquarters than it would cost to settle the dispute. The new organisation, which employs signal workers and will sell the right to use track to privatised companies, has spent pounds 7m on its offices near Russell Square. It has earmarked a further pounds 88,000 to repaint signs in Railtrack colours. The informal 5.7 per cent productivity offer, which union leaders say they were prepared to accept, was worth an estimated pounds 4.8m. The formal offer is for only 2.5 per cent.

Jill Rutter, a member of the Downing Street policy unit, attended the meeting on Friday at the behest of the Department of Transport, which was also represented. Unions and opposition politicians have already blamed John MacGregor, the Secretary of State for Transport, for the withdrawal of the 5.7 per cent increase.

Mr MacGregor has denied that he insisted on the 5.7 per cent offer being taken off the table. Railtrack has also claimed that there was no political interference.

Now, Ms Rutter is accused of acting on Downing Street's behalf. She once worked with John Major at the Treasury. A spokesman for RMT, the rail union, said the meeting she attended held up negotiations, which could have started on Friday lunchtime but were delayed until yesterday. 'It is clear that Railtrack had to get more orders from the Government,' he said.

The union has accused Railtrack of further delaying talks for the same reason. The company denies this and says that it wants time to consider a complex package on restructuring pay and to consult the Railtrack board, which meets tomorrow. Acas officials were clearly taken aback by Railtrack's insistence on an adjournment.

A Downing Street spokesman, commenting on Friday's meeting, said that there are regular meetings between Railtrack and the Department of Transport and Ms Rutter was invited so that she could give a first-hand report, but that she has no role in the negotiations.

But John Prescott, Labour's employment spokesman and a member of the RMT union, said: 'John Major has been caught red-handed interfering directly in the pay talks. He has misled the country about the Government's involvement.'

Railtrack yesterday offered more details on a proposal to recast the wage system so that virtually all overtime payments and allowances are abolished in return for a higher basic rate. It said this would deliver basic increases of around 11 per cent but Vernon Ince, chief union negotiator, said it would not 'add a penny piece' to signal operators' total earnings which, with overtime and allowances, average about pounds 22,500 for those in the largest and most modern signal boxes and pounds 13,390 for those in the smallest manually- operated boxes.

Bob Horton profile, page 19

Leading article, page 20