Britain's rail maintenance is to be taken in-house by Network Rail after the company found that using private contractors was wasting hundreds of millions of pounds of public money.

The not-for-profit company will announce this morning that all the work will be taken back in-house, meaning that 18,500 rail workers will transfer from seven private companies to Network Rail.

The company believes it can save £200 million a year by doing the work itself.

A source close to transport secretary Alistair Darling told today's Times: "It was exactly the reason we set up Network Rail to take such bold decisions, to get control of costs and get things moving."

Meanwhile, today's Guardian reports that maintenance company Jarvis has hired Jonathan Haslam, John Major's last Downing Street press secretary, to improve its image after being accused of falsely submitting documents when train track was wrongly laid.