An 18-month study of the impact of transport decisions on the economy and the environment has concluded that the Government should concentrate on improving the existing road and rail networks rather than building new high-speed rail links or cross-country motorways, The Times has learnt.

The report, by Sir Rod Eddington, the former chief executive of British Airways, has called for the big investment decisions of the next 20 years to be tied to the environmental and economic benefits that will accrue from them, government sources have disclosed.

Rather than opting for “flashy” and expensive projects costing billions, the Government should act to ease pressure at “pinch points” that are showing increasing congestion and unreliability.

He concludes that all modes of transport should pay their full environmental costs, including compensating for their contribution to climate change.

This part of the report has been strongly influenced by Sir Nicholas Stern, the head of the Government Economic Service, who published a report in October recommending urgent action to reduce carbon dioxide emissions. Sir Nicholas chaired a panel of senior academics that advised Sir Rod.

Sir Rod’s message — very much in keeping with the approach of Gordon Brown, who commissioned his report — is that the Government should focus sustained and targeted investment on schemes than can demonstrate high returns.

For that reason ministers will consider the introduction of double-deck trains on busy routes, and the report proposes longer trains on commuter routes. Sir Rod will back the building of new rail freight links to major ports and better road access from the motorways to the ports. He will also propose cycling and walking schemes.

Sir Rod’s conclusion is that Britain has broadly the right transport network, connecting the right places, but that key points are coming under intolerable pressure that must be eased. The investment should come in the places that are vital to economic success. The priority should be congested and growing cities, inter-urban corridors and international gateways such as ports and airports.

Sir Rod backs the principle of road pricing, although he suggests it should be introduced gradually when there is political support for it. That is the approach favoured by ministers who will soon introduce a Bill giving local authorities powers to consider local road-pricing schemes.

Sir Rod believes that planning procedures must be reformed to speed up construction of transport infrastructure.

He implies that the Department for Transport’s improvements to roads, ports and railways are too slow. His report is expected to prompt a review of the department’s structure.

Sir David Rowlands, its permanent secretary, who is retiring next year, has acknowledged its shortcomings in a memo that has been leaked to The Times. He says that the appointment of his successor will be announced before Christmas because of the need to respond to the Eddington report. He writes: “There may be some organisational or structural implications arising out of Rod Eddington’s review which a new permanent secretary may want to consider before formally taking the post.”

The Conservatives said that the country needed a programme to ease pinch points as well as big projects to make a lasting difference. Chris Grayling, the Shadow Transport Secretary, said: “The Government has clearly failed to follow through on its stated aim of improving our transport system.”

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