The chairman of the Office of Rail Regulation, Chris Bolt, has written to the government-backed company demanding to know why it only spent £5.8bn of the £6.7bn envisaged in its business plan.

Network Rail's underspend is likely to arouse anger among train operators and passengers. The Strategic Rail Authority, the government body that oversees the rail system, last year gave the green light for inflation-busting fare rises of 4% to help raise an extra £30m annually for investment in the network.

Mr Bolt said some of the shortfall could be explained by an improvement in Network Rail's efficiency. But he has found evidence that less work was carried out than anticipated on the replacement of signals and tracks.

"They are clearly behind on some elements of their plan," said Mr Bolt. "What we need to make sure is that Network Rail is not storing up problems for the future."

In a review of the company's performance, Mr Bolt praised Network Rail for beating targets on safety and cutting delays. Punctuality reached 83.6% in the year to March, against a benchmark of 82.8%.

However, he said any slippage in maintenance and replacements could come back to haunt the company by pushing down train performance in future years. He said renewal of signalling was £170m below budget, while 107km out of a planned 1,871km of track replacement was not carried out.

"The evidence is that the underspend is not from unit cost efficiency," said Mr Bolt. "It is from doing less work."

He said that if Network Rail fell behind schedule on its "outputs", he would consider taking enforcement action.

News of Network Rail's spending shortfall is likely to prompt questions about the extent of track closures at weekends and on bank holidays.

It will also prompt fresh scrutiny of a controversial review of the company's spending requirements, carried out two years ago by the former regulator Tom Winsor.

Mr Winsor ruled that Network Rail needed £22.2bn over five years - an increase of £7bn on the government's original plans - to make good a backlog of repairs neglected by Railtrack.

His binding decision infuriated the transport secretary, Alistair Darling, who was reported to have had a "shouting match" with Mr Winsor when he heard the size of the bill.

The Strategic Rail Authority was similarly critical. At the time, a spokesman compared the provision of extra funds to "giving an alcoholic a bottle of whisky".

Network Rail's chief executive, John Armitt, pointed out yesterday that engineering work had increased dramatically despite the shortfall in spending.

Track renewals were up 95% over five years, ballast renewal increased by 81% and the number of sets of points replaced had quadrupled. He blamed the underspend on a cautious approach to spending under which Network Rail avoided carrying out work until it had been adequately planned and costed: "We are not prepared to spend money on projects that simply aren't ready," he said.

"We make no apology for deferring spending to later years as we are determined to ensure tight budgeting and a clear understanding of what needs to be delivered."