Under fire: Byers

Stephen Byers has hit back at critics of the government's handling of Railtrack.

The transport secretary told MPs that a "so-called leaked" document of rules about Railtrack's future had been laid before parliament on October 8 and a copy placed in the Commons library.

Newspaper reports at the weekend had suggested that Byers had planned to wind up the troubled rail company more than a week before the official announcement was made.

The Railtrack insolvency order, filed as part of the court moves to put the company into administration, is dated October 6 to take effect on October 7. However, the date of September 28 is also on the top of the document, indicating a copy was probably faxed on that day.

In an emergency question, shadow transport secretary Theresa May argued that Byers' handling of the Railtrack administration had called into question the credibility of the whole government and she demanded a full public independent inquiry.

"This clearly shows that the government was on the verge of putting Railtrack into administration much earlier than Stephen Byers claimed," she said.

"As more pieces of the jigsaw come together, it now appears that far from this being a decision made during the course of the afternoon of October 5, as he claimed, this was a drawn out act of wilful destruction by the secretary of state."

The Conservatives again called for Stephen Byers to resign.

"There is a huge obstacle in the way of future investment in the railways. That obstacle is the secretary of state and he must go," said May.

Byers told MPs that the decision to wind up the company was taken around midday on October 5 and that it was "no secret" that contingency plans to put the company into administration had been made as early as August 23.

It was Railtrack's own advisers who had first raised the possibility of insolvency, he told the Commons. And turning on his Conservative critics, Byers asked why Railtrack's directors had not informed shareholders of financial problems after informing him in confidence of the situation as early as July.

"Surely the question Railtrack investors should be asking is what about the role of the directors?" he told the Commons.

"Railtrack was a creation of the Conservative Party. It clearly cannot come to terms with the fact that this failed Tory privatisation has been brought to an end by this government," he said. "The time has come to put delivery to passengers before dividends to shareholders."

But the Conservative benches dismissed his denials, continuing to argue that ministers had examined plans to place Railtrack in administration earlier than had been admitted.

"The government owes it to shareholders, particularly employees who have their savings invested in the company, to come clean over the events leading up to the collapse of Railtrack," said May.