A SENIOR executive of Railtrack, the private company that presided over the virtual collapse of the rail network after the Hatfield crash, was paid £700,000 of taxpayers’ money after the company’s demise.

Richard Middleton, the firm’s top engineer, received the money after Railtrack was placed in administration. The payment, for just six months’ work, effectively quadrupled his salary, despite the private company’s failure.

The revelation of the generous payment — expected to be made in the annual accounts of Network Rail, the new rail operator, this week — will provoke fury among trade unions, rail safety campaigners and opposition parties. They believe the government takeover of Railtrack was botched by Stephen Byers, the former transport secretary.

Tim Collins, the shadow transport secretary, said: “This blows away claims that Railtrack had to be wound up to save the taxpayer money. Not only is Network Rail losing vastly more money than Railtrack; it turns out it had to pay Railtrack personnel huge sums to carry on doing exactly the same job at the taxpayers’ expense and at vastly higher rates.”

Middleton was paid the money by Railtrack’s administrator to persuade him not to resign, a move that would have led to management chaos. His knowledge of the network was thought vital to prevent further decline and he was able to name his price, say insiders.

His massive jump in pay included a doubling of his basic salary of £168,000, a hefty retention bonus and a year’s salary for loss of office. Other key directors received less lucrative packages.

Middleton was an executive director at Railtrack during a string of disasters including the 1999 crash at Ladbroke Grove in west London which killed 30 people, and the derailment at Hatfield the following year in which four people died.

When engineers discovered the Hatfield crash had been caused by a cracked rail, the board, including Middleton, ordered a massive replacement programme which paralysed the network for months.

He also had responsibility for overseeing the disastrous upgrade of the West Coast main line, which ballooned in cost from £2 billion to £12 billion.

Byers put Railtrack into administration in October 2001. Former Railtrack staff say he led a delegation of senior employees to see Alan Bloom, a partner at Ernst & Young, which had been appointed to run the firm. “In essence he told Bloom that the administrator needed these key staff to run the company, and, unless he paid them to stay, the network would grind to a halt,” said a former staff member.

The money has become known as “Byers’ bill” in the industry. Until now it had been thought that some 453 Railtrack staff shared a bonus pool of £6.7m, with retention payments of about £100,000 going to Middleton and a number of other executive directors.

Both Network Rail and Middleton declined to comment.

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