Mr Winsor said management at the firm had been wrongly convinced by the threats, even though it would have taken 12 months to pass the necessary laws.

"They believed that, and I think that was a disastrous error on their part but that was the judgment they made," he said.

Almost 50,000 former Railtrack shareholders are suing the government, claiming it plotted to push the company into administration. In the largest class action seen in Britain, the shareholders are seeking £157m in compensation.

The shareholders accuse the government of not properly considering ways in which the company could have continued to operate, because it secretly wanted to renationalise it.

The government has rejected such accusations, saying it was acting in the best interests of the public.

Mr Winsor said that, on the eve of Railtrack being put into administration, he offered to set up a review that would make more cash available to the company.

"The fundamental point is that Railtrack had access to potential billions of pounds of additional money via my jurisdiction as rail regulator," he said.

"When Railtrack went down, they were satisfied that a threat by the former transport secretary Stephen Byers to undertake emergency primary legislation to take my office under direct political control was as good as passed.

"It was not. It would have taken a year to pass. It would almost certainly have required the Parliament Act to get it through and until then my jurisdiction would be intact."

Mr Winsor told the BBC Radio 4 Today programme: "They [Railtrack] said, unless I could complete a review in 24 hours and put the money in their account on Monday, there was no point in starting the review. I found that quite extraordinary but that is the position that they took."

In testimony to the high court last month, Mr Byers said he had not been truthful to MPs about the events leading up to the collapse of Railtrack.

He told the high court his evidence to a Commons sub-committee was not accurate. He apologised but said he had not been trying to conceal any plot.

He denies forcing Railtrack into insolvency to avoid compensation pay.