Keith Ludemann, whose Go-Ahead Group is majority owner of the London Midland commuter rail franchise, said Network Rail appeared to think it could now move on from the route's £8.9bn upgrade to its next big project.

"The job isn't done on the West Coast," Mr Ludemann said. "We've spent £9bn and the infrastructure is letting us down."

Robin Gisby, Network Rail's director of operations and customer services, accepted responsibility for the problems. "We have to fix it," he said.

Half or more of Virgin Trains' services arrived more than 10 minutes late on some recent days, while London Midland's services have also been severely affected. There have been repeated failures both of equipment newly installed as part of the upgrade, completed in December, and of older equipment suffering under the strain of more frequent, faster services. Only 80 per cent of Virgin's trains now arrive on time on average, against a network-wide average of more than 90 per cent.

The faults are the latest setback for the route, whose upgrade took far longer, cost far more and provided less capacity than expected when it was planned more than a decade ago. The project helped to cause the collapse of Railtrack, the stock market-listed company from which Network Rail took over the rail network in October 2002.

Over-running engineering work on the route was a leading factor in the decision by the Office of Rail Regulation to fine Network Rail £14m last year.

The collapse in service quality followed the introduction in February of the full "Virgin high frequency" timetable offering trains every 20 minutes to Birmingham and Manchester from London, at much-improved journey times.

Virgin this week agreed a plan with Network Rail to rescue the situation, but refused to sign any agreement lasting beyond September 19.

Virgin believes Network Rail needs the continuing threat of regulatory action by the ORR - which could lead to a fine - to focus it on resolving the problems. Under the plan, Network Rail will send teams of engineers during train operating hours to a series of key points, to monitor the condition of the most critical equipment.

Mr Collins said only Mr Gisby of Network Rail's senior managers appeared to understand the situation's gravity. "I don't think anybody else on that top team gets it," he said.

Others seemed to think that as long as the company hit its regulatory targets it was doing well. "They see themselves as an engineering company, not as a service operator," Mr Collins said.

Virgin had warned in advance about potential problems but been ignored, Mr Collins added. Poor reliability was hitting fares revenue, Mr Ludemann said.

Mr Gisby accepted the introduction of some technology, particularly train-detection equipment known as axle counters, had not gone well. But a new maintenance management team should change things.

"I think [the team] and engineers understand very clearly what I expect of the axle counters and I think I'm going to get them there," Mr Gisby said.

The same went for other problem-prone equipment, including overhead wires, some of which Mr Gisby admitted had not been

installed properly.

The problems were more severe for Virgin than others using the route because it now ran such a regular, high-speed service.