The crisis on the nation's railways dominated PMQs with the prime minister repeating his support for transport minister Stephen Byers.

The two Opposition parties focused their fire on the government's efforts to improve the country's creaking transport system and the rising number of ministerial advisors trying to find solutions.

In the first PMQs of the New Year on Wednesday, which was less rowdy than usual, Tony Blair admitted that it had been a mistake for Railtrack to continue to operate into the government's second term.

With the appointment of Lord Birt and news that another advisor had been appointed to consider short-term policy ideas, Tory leader Iain Duncan Smith began with a simple question.

"Who is in charge of transport policy?" he asked.

"The Secretary of State for Transport,'' Mr Blair replied.

"I know you've been away for a long time but while you have been away your transport policy has descended into farce,'' the Tory leader said.

"You've got Lord Birt, with all his great expertise on railways, in charge of long term transport policy. You've got a management consultant now in charge of short-term transport policy. And today we read that your deputy chief whip (Keith Hill) is in charge of negotiating with striking rail unions. Just what is the purpose of the transport secretary?''

Blair hit back saying Lord Birt's appointment had been announced in September to undertake work for the Downing Street policy unit about long term trends in transport and governments have had policy units for decades. Stephen Byers' role was clear.

"In relation to what the transport secretary does. He provides the long-term investment for the railways and also sorts out the appalling mess left by railway privatisation. We are in favour of that long term extra investment in our railways and believe that Railtrack could not go on as it was getting billions and billions of public money and not delivering a decent service to passengers. Now perhaps on those two issues ... you will give us your views," Blair said.

Duncan Smith was ready to retaliate and was armed with figures showing delays were getting worse.

"The one thing that is absolutely clear about Mr Byers is that he is not there to make the trains run on time," he began. "Figures now available, that you stopped publishing, show that before the strike Connex South East delays were up by 50 per cent, South West Trains were up by 70 per cent and First Great Eastern up by 95 per cent.

"Yesterday, Mr Byers said he was going to be in the post for years and years. Surely the only certainty here is that under him the chaos on the railways will be in place for years and years. Isn't it time you sacked your Transport Secretary?'' Duncan Smith said.

Blair repeated Downing Street's line that only Hatfield had revealed the state Railtrack was in."It's absolutely correct that after the Hatfield rail disaster reliability went down very considerably. That was for a very simple reason. After Hatfield it became clear that the state of the railway infrastructure was far worse than anyone had ever imagined and that is the result of cumulative under-investment going back many years.''

Duncan Smith hinted that Blair had been away too long and transport policy had spun out of control in his absence.

"Now that the prime minister is back home he should stay home and get a grip," he said.

Liberal Democrat leader Charles Kennedy accepted the government had inherited a shambles but said that after five years, a genuinely benign economy and a three figure majority transport policy was still a shambles.

Blair accepted mistakes had been made in allowing Railtrack to continue to operate but it had been out of fairness.

"We believed at least we should have given the system the chance to work," he said.

Labour backbencher Bob Marshall Andrews got a hint from the prime minister that the government may be prepared to compromise on its plans to reform the Lords. The Labour backbencher had called the plans unveiled as replacing "inherited rotten patronage with contemporary rotten patronage".

Blair pledged to "listen carefully to the House's views" but warned there were "almost as many different views as there are members of parliament".

Replying to a question on foreign policy Blair accused the Tories of isolationism by objecting to British involvement in Sierra Leone, Macedonia as well as Pakistan and Afghanistan.

"It's the Howard Hughes school of diplomacy and I don't think it's very effective," he said.