Opening the department's defence, Jonathan Sumption, QC, said that, for the misfeasance claim to succeed, it would have to be shown that harm to the former shareholders was not just a by-product of Railtrack's administration its very purpose".

A trawl through government e-mails and documents in the months leading up to the October 7 2001 administration petition had shown many notes in which officials suggested the effect on shareholders was a "demonstrable drawback" to the administration option.

If the claimants' case was right, such notes would have had to say that damage was an advantage. That was a "perfectly absurd" proposition - yet one on which the claimants' case was founded, said Mr Sumption.