The clearance opens the way for the break-up of London & Continental Railways (LCR), which built the High Speed 1 link between London and the Channel Tunnel.

Thousands of tunnelers and engineers have already gone, leaving a company that owns 68 miles of high-speed track, a stake in the Eurostar service that runs on it, and some of Britain's most valuable development land nearby.

The British government will pay off LCR's debts so that it can reorganise the finance behind the 186 mile-per-hour (299 km per hour) railway and split apart the group's transport and infrastructure activities before a sell-off.

Possible buyers for Eurostar UK -- the British arm of Eurostar, which runs high-speed services between London, Paris and Brussels -- include Germany's Deutsche Bahn. The German rail operator expressed an interest in January.

Australia's Macquarie Bank and Deutsche Bank have also previously expressed an interest during an aborted bid for Eurostar in 2006 by financier Sir Adrian Montague and Goldman Sachs, industry sources say. As part of LCR's restructuring, charges for access to High Speed 1 will be reduced, in line with EU plans to inject more competition into high-speed railways by 2010 and ending Eurostar's privileged position on the route.

"The Commission regarded positively the unbundling of operation and infrastructure activities and the future significant reduction of access charges," the EU executive said in a statement.

"These measures are designed to promote the execution of an important project of common European interest," it said. (Reporting by Pete Harrison)

See also:

EU approves British state aid for high-speed Eurostar line

EUbusiness: 13 May 2009

(BRUSSELS) - The EU's top competition watchdog on Wednesday approved 5.2 billion pounds (7.9 billion dollars, 5.8 billion euros) of British state aid to develop Eurostar, including the high-speed rail service which links London with Paris and Brussels.

The money was used to construct a high-speed track between London and the English Channel before which Eurostar trains used to chug relatively slowly through southeast England after racing up from the French and Belgian capitals.

The operation notified by Britain involves public support, mainly in the form of debt cancellation, and puts in place a "sustainable financial structure" for the high-speed rail link. Proper independent monitoring of the whole process will be guaranteed.

The operation will also result in the unbundling of infrastructure and transport activities, and a significant reduction of access charges, thereby benefitting competition and users ahead of the forthcoming liberalisation of international passenger transport by rail in 2010.

The German national railway Deutsche Bahn has already said it is interested in buying a stake in Eurostar.

The European Commission assessed that "the restructuring plan complies with the prescription of the rescue and restructuring guidelines."

In particular, "the commission made sure that the restructuring involves sufficient compensatory measures in favour of possible competitors," the EU's executive arm said in a statement.

The EU decision includes "certain commitments" by British authorities to ensure proper monitoring of the whole operation.

Britain has agreed to discuss with the commission a list of independent financial advisers to assist with the monitoring process.

It has also committed to undertake the application of the so-called "one time last time" principle preventing the granting of additional restructuring aid in the future.

London and Continental Railways (LCR) is the developer of high speed rail link in England, which was delivered in November 2007.

LCR is also the owner of Eurostar (UK) Limited, which operates the Eurostar train service in the UK.

See also:

EU Commission OKs GBP5.17B State Aid For UK Railway, Eurostar

Dow Jones Newswires: MAY 13, 2009
By Alessandro Torello,

BRUSSELS (Dow Jones) --The European Commission Wednesday approved GBP5.17 billion of U.K. government state aid to support a high-speed rail link between London and the British Channel.

"The operation notified by the United Kingdom involves public support mainly in the form of debt cancellation and puts in place a sustainable financial structure for the high-speed rail link," the commission said in a statement.

London & Continental Railways is the company developing the high-speed train connections between London and the tunnel under the British Channel, and operates the Eurostar train service in the U.K. The tunnel then connects to the continental European high speed rail network in France.