The crucial track workers had been employed by the Jarvis engineering firm to help keep Britain's railways safe, but were unceremoniously dumped on the dole in March when bosses at state-owned Network Rail cut funds for the work.

Jarvis chairman and former Tory transport minister Steven Norris then called in administrators Deloitte - who admitted that their first priority was to hand over £17 million to Jarvis's Bank of America and Bank of Ireland creditors.

Another £900,000 worth of the firm's assets were sold to pay for Deloitte's work paying the banks, while the 1,200 engineering workers who made the firm's profits were left with nothing - despite being owed £28m in unpaid wages and holiday pay.

Railworkers' union RMT leader Bob Crow savaged Con-Dem ministers for allowing "the workforce to take a hammering, while company directors and the banks that finance them are protected at every turn.

"The government has an obligation to the Jarvis workforce to make good the money that they are owed," he raged.

"These workers were employed to maintain the nation's railways, and it's only because of privatisation that they ended up working for a cowboy outfit like Jarvis in the first place.

"But if the government can find tens of billions to bail out the banks then they can find the £28m that's owed to the Jarvis staff," the union leader stormed.

Following demonstrations around the country by the sacked workers, Mr Crow revealed that RMT had now filed legal claims alleging that Jarvis bosses had unfairly dismissed their staff and demanding that engineers given low-paid work with rival firms be paid the same wages that they earned before.

"If you want to see how loaded the laws are in this country against the workers just look at the Jarvis scandal.

"The staff get a kick in the teeth and the banks get everything they are owed," Mr Crow fumed.