Taxpayers are set to receive higher bills for a poorer rail service, the Conservatives have said.

The warning, from shadow transport secretary Tim Collins, followed the publication Network Rail's business plan.

It predicted that running Britain's rail network will cost £6 billion per year for the next three years, compared to the annual cost of £3 billion originally planned.

Spending for the period 2000 to 2006 will total £27 billion, the report estimates, compared to the £16.7 billion allowed for by rail regulator Tom Winsor, who will take these revised figures into account when deciding how much rail companies can be charged for using the track.

"These figures confirm that the financial management of the rail network has sharply deteriorated since Labour minister's effectively took direct control when they shut down Railtrack," said Collins.

"It is now alarmingly clear, not only that that precious few of the long term infrastructure improvements promised under the 10 year transport plan will happen, but the fact that the long suffering taxpayer will now have to shell out billions of pounds extra for a rail service whose punctuality, frequency of service and accessibility seem likely only to get worse."

The Liberal Democrats called on chancellor Gordon Brown to release more funds for rail services before the 2004 spending round.

"It is now clear that the chancellor cannot afford to wait for the next spending round in 2004 before making more money available for our railways," said transport spokesman Don Foster.

"The chancellor's popularity would increase tenfold if he kick-started the delivery of the decent rail service the country needs and deserves."

Ian McAllister, chairman of Network Rail, said that Britain's railways were suffering from "a huge legacy of under-investment".

"It is now six months since Network Rail acquired Railtrack Plc and all our experience since then has confirmed our initial analysis," he said.

"We have a fragile network that has been starved of a steady rate of renewals for many years, resulting in poor performing infrastructure that needs more maintenance to carry ever more traffic.

"Network Rail is here to address the problem this legacy has left. Action is being taken, but time and patience is needed to see the changes we're making deliver results."

The report also set out a number of targets to be reached by 2005/06, including an aim for delays caused by the company to be reduced by a fifth and a 39 per cent fall in the number of broken rails.

"We are determined to turn this problem around, but it will take time and although we have an unwavering commitment to driving down costs, the network simply needs large-scale investment to replace worn-out assets," said McAllister.

"We recognise that the current costs are unaffordable in the long term. We must be prepared to challenge the assumptions behind the costs, ensure they are robust and strive to deliver even more efficiencies where possible," he added.

The report was welcomed by passenger groups.

Anthony Smith of the Rail Passengers Council said it showed that Network Rail was "starting to get on top of its maintenance responsibilities".

"The scale of the challenge for the railways is now clearer. Instead of spending to stand still, Network Rail and the industry need to be looking to the government for the kind of sustained investment that will enable them to plan for and deliver a safe, more reliable rail network three or five years from now.

"It may be some time before passengers see the benefits of the massive investments already being made but this business plan gives us a glimpse of what needs to be done if we want to move forward," he said.