Byers told that rail punctuality is getting worse

Stephen Byers admitted that for some passengers rail journeys were "a nightmare" and travelling on a Sunday was "an adventure".

The Secretary of State for Transport was warned at a conference that train services were as bad as they were immediately after last year's Hatfield disaster and that the network was potentially more dangerous. The system was "falling apart again" since Railtrack was taken into administration by Mr Byers because the company no longer had a financial incentive to make it work, Tom Winsor the Rail Regulator, has been told.

Stewart Francis, leader of the Rail Passengers' Council (RPC) said he was worried safety could be undermined as Railtrack tried to cope with the "body blow" of insolvency. Representatives from all over the country told the annual RPC conference of a steep deterioration in punctuality and reliability since 7 October when Railtrack was declared insolvent. Track and signal failures had increased by 45 per cent in two months.

Directors of Britain's biggest train companies told Mr Winsor at a meeting on 27 November that the network company no longer cared whether it incurred financial penalties for poor performance because it knew that taxpayers would have to foot the bill. One train operator said: "Railtrack people do not care about money any more because they have lost all theirs." The senior director said of the Government's performance: "The Department of Transport is fiddling while our balance sheets burn."

One Railtrack insider said it was inevitable cost controls had been loosened at the company. "History shows us that when there is money to spend, railways spend it quickly. If there are projects that managers want to get through, now might be the time to do it." Another senior source said it was now "screamingly urgent" that Railtrack was taken out of administration so the company could get a grip on performance.

But Mr Byers told the conference in central London the successor to Railtrack had to be put on a sound footing even if the administration lasted a couple of months longer than the industry wanted to see.

The senior industry source said Lord Cullen, who chaired the inquiry into the 1999 Paddington disaster in which 31 people died, concluded that safety and performance were "two sides of the same coin".

Mr Francis said the railway system was paralysed a year ago by speed restrictions imposed after Hatfield. "I do not think that any of us could have imagined that anything could be worse than that. A year later we are in a much worse and potentially more dangerous situation. The rail industry is in a complete and utter mess."

A spokeswoman for Railtrack said there was no evidence to support contentions that services had deteriorated. "Both the board of the company and the administrators are focused on the issue of performance. Safety is also in the forefront of their minds."

In a keynote address to the conference, Richard Bowker, new chairman of the Strategic Rail Authority, said it would take time to turn the industry round, but there were some parts of the service that could be improved in the short term including the stations. "They are the gateway to the service and some are truly dire," he said.

Later, Mr Byers confirmed the railways would get several billions from his £60bn budget for roads, spread over 10 years.