Number 10 has rejected claims that Stephen Byers planned to wind-up Railtrack a month before the decision was announced.

Survivors of the Paddington rail crash said on Tuesday that the transport secretary told them at a meeting on September 12 last year that the railway infrastructure company "wouldn't be much trouble much longer".

The announcement that Railtrack was being placed in administration was made on October 7.

Byers told parliament that the decision had not been made until October 5.

Paddington Survivor's Group chairman, Pam Warren, told the Daily Mail: "Mr Byers lied. He lied to parliament."

Downing Street said that it did not recognise Warren's version of events and insisted that the prime minister was standing by the transport secretary despite the latest controversy.

A spokesman for the department of transport insisted that no decision had been taken at the time of the meeting.

"The crucial element here is that no decision had been taken at the time of this meeting. But we are not going to get into who said what to whom," he said.

But the department conceded that "various options" for the future of Railtrack may have been discussed at the meeting.