SPLITTING responsibility for trains and tracks when privatising the railways was a fundamental error and the link must be restored, the Conservatives will say today in a major shift in policy.

The party will propose that train operators should be allowed to run their own tracks, with one option being to create regional companies like those that dominated the network before the Second World War. David Cameron, the Tory leader, and Chris Grayling, the Shadow Transport Secretary, will visit Clapham Junction in South London to announce a review of the rail industry that will focus on reuniting wheel and rail.

They will admit that John Major’s decision to create one company to manage the tracks and another 25 to run trains was fatally flawed.

Mr Grayling told The Times that the divisions in the industry created by privatisation were partly responsible for the quadrupling in subsidy and the worsening problem of overcrowding. He said companies that controlled both trains and tracks would be more efficient.

“There are too many participants in the current structure,” he said. “There is also an excessive level of contractualisation. Too much time is spent debating the fine detail of contracts and not enough on getting things done. With hindsight, the complete separation of track and train has not turned out to be the right way forward.”

A number of options would be considered, including creating joint ventures between train operators and Network Rail’s divisions. Operators might also be allowed to lease tracks for long periods.

“However, we are not going to simply break up Network Rail and sell it off,” he said.

The new structure is likely to be tested in areas where one train operator already dominates, such as Scotland, Merseyside and the South West Trains network, which operates from Waterloo station in London.

Network Rail will fiercely oppose any attempt to end its monopoly over Britain’s 21,000 miles of track. In April John Armitt, Network Rail’s chief executive, rejected a proposal from First, the biggest train operator, that it should be allowed to run its own tracks. He said that First would minimise investment.

“It would be more rational for us to go and lease the trains,” Mr Armitt said.

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