The transport secretary has said the rail industry is finally back on track after decades of crisis.

Speaking to a Strategic Rail Authority conference, Alistair Darling described himself as a "natural pessimist".

But after years of chaos in the industry the cabinet minister said he could see the light at the end of the tunnel.

"I detect of a new spirit of confidence in the industry," he said. "I believe that there is now a clear sense of direction and a real determination to make progress."

"We've put the difficulties of Railtrack behind us."

Darling signalled that as secretary of state he would not just take the flak for rail failure.

He is prepared take a more proactive approach than his predecessor, Stephen Byers.

"Someone said it was my job to provide covering fire while the industry got on with the job. Up to a point," he said.

"My job is more than that. I am determined to do everything I can to work with you to deliver a better railway."

With a new not-for-profit Network Rail maintaining track infrastructure and investment now coming on stream, Darling said the way was clear for the SRA to "provide strategic direction".

"With a strategy in place, the focus for the industry must now be on getting to grips with what needs to be done," he insisted.

Darling defended "difficult and frustrating" line closures on the west coast mainline as "the right thing to do because it allows work to be done more quickly and with substantial cost savings".

But he warned the rail industry that it had to deliver better services.

"People expect the improvements promised will have begun to be delivered by the end of 2004," he stressed.

"You must look at the railways through the eyes of the customer. They'll accept some temporary difficulty if they can see that it's leading to a better service. But be in no doubt, they won't be happy until they see that better service."

And he justified as "realistic" the decision to abandon plans for continental high speed trains on the key rail route.

"We will take a hard line on cost increases. You cannot approach projects on the basis that if that's what it costs, so be it. Projects have to come in at an acceptable cost," he cautioned.

"No company, no government, can ever sign blank cheques. Projects have to make economic sense - and costs have to be controlled. That means projects have to be realistic and capable of delivery."

And Darling warned rail chiefs that "whenever I see costs starting to escalate I'll stop and ask why".

"We'll have to reconsider our priorities just like the way we have done with the west coast mainline upgrade."

Flagging up "difficult decisions" for the industry, Darling admitted scaling back plans and closing key routes in order to carry out work were not popular with long suffering rail passengers.

"None of this is easy. Decades of neglect cannot be turned round easily. Significant change rarely comes without some pain."

But despite the inevitable problems ahead, the transport secretary is confident rail has a future.

"I am confident that if we concentrate on our objective of building a reliable safe railway fit for the 21st century, we will deliver it," he promised.