The full statement given by transport secretary Stephen Byers on the offer made to Railtrack shareholders.

"Mr Speaker, I would like to make a statement on the bid for Railtrack p.l.c. made today by Network Rail.

As the House will be aware Railtrack was taken into administration on 7 October as a result of a High Court Order.

As Mr Justice Lightman said at the time:

'This is clearly a case where the making of a railway administration order is not only appropriate, but absolutely essential, and I shall therefore make that order immediately.'

The reason Railtrack was put into administration was that it was, or was likely to be, unable to pay its debts. But let's remember that it had failed to maintain the railway safely and properly. It had failed to gain a proper understanding of its assets. Hatfield and its aftermath demonstrated this. And it had failed to manage modernisation projects like the West Coast Main Line.

Let us not forget that Railtrack was at the heart of the flawed and failed privatisation carried out by the Tories.

The government has always said that what we need is a successor to Railtrack that is focused on the public interest and on the needs of passengers.

Railtrack has made some progress during Administration under the management of John Armitt and his appointment as chief executive has been widely welcomed in the industry.

I agree with the Transport Select Committee which said:

"It is imperative that the process of administration be completed as soon as possible."

Because of the difficulties in putting together a business plan and the limited knowledge this company has of its own assets, the administrator has indicated that there will be further delays in launching his competitive process.

What we need is an end to administration so that the improvements we all want to see to the country's rail infrastructure can be delivered as soon as possible.

There is therefore a value to the government, the taxpayer and rail users in an earlier exit from administration. Network Rail's bid reflects this approach.

Network Rail say that their proposal could if accepted take Railtrack plc out of administration as early as the end of July 2002.

Network Rail is a company limited by guarantee. It will not have shareholders so won't be paying out dividends. Unlike Railtrack, its operating surplus will be re-invested in the rail network.

It's core focus will be the maintenance and renewal of Britain's railway. They will focus on the needs of the travelling public, not short term profit for shareholders.

They will be able to raise capital for investment more cheaply.

A better deal all round for the travelling public.

The government has always said that Railtrack shareholders should get the value in the company to which they are entitled.

Railtrack Group has assets that could be used to provide value for its shareholders. My understanding is that Railtrack Group has over £350 million in cash deposits, and an interest as owner in section one of the Channel Tunnel Rail Link and some property interests.

The government has indicated that a grant of £300 million will be made available to reflect the benefits of an early exit from administration. If such an early exit is not achieved then the money will not be available.

Mr Speaker, an earlier exit from administration, resulting in a more focused and efficient rail network operator would lead to the quicker realization of efficiency savings, it would reduce performance penalties, and it would allow 10 year plan projects to proceed more quickly.

Network Rail's proposal, based on the concept of a company limited by guarantee is designed to be more efficient than Railtrack, with lower financing costs and no dividends to pay.

That is why the government is prepared to make this payment.

For the government it will be self-financing from savings that will be made. It therefore follows that if there is not an early exit then the savings will not be made and in such circumstances the £300 million will not be available.

Since Railtrack was taken into administration the government has said that every single penny of taxpayers' money must be used to improve the rail network.

That is exactly what this grant of £300 million will do. It will benefit the travelling public - that has to be our top priority.

The Administrator has said that he is actively reviewing Network Rail's proposal in the context of the Administration.

If the bid were successful, it would enable a company limited by guarantee to become the successor to Railtrack. As the House will know, the government has said all along that it views a company limited by guarantee as an attractive successor body.

Network Rail is committed to engineering excellence. Their bid has the potential to bring the rail industry together and overcome the fragmentation that has all too often characterized it in the past.

It is now for the Administrator to decide how he should conduct the process in the light of today's bid. He has confirmed that he will treat any further proposals that might be made on their merits.

Getting Railtrack out of administration must be done on the basis that it will produce a viable, financially sound company, one that takes a long term perspective, and that puts the emphasis first and foremost on operating a safe, efficient and reliable rail network.

Taking action on Railtrack has been criticised by some including the Tories.

But today's developments demonstrate what can be achieved:

A railway system that is united and not fragmented

A railway industry with a shared strategic vision

A railway industry that values its employees and will invest in them

A railway network provider that will answer to the millions of passengers and not to private shareholders

This is all now possible as we lay to rest Railtrack and develop a railway system for the future."