Rail Minister Theresa Villiers announced plans to allow train companies greater commercial freedom in the way that they deliver services in return for more private investment in the railways.

The proposals presented for consultation also include offering future franchises for 10 to 15 years rather than the current average of around eight years.

Ms Villiers insisted that the decision would provide better value for taxpayers, but RMT general secretary Bob Crow hit back: "Every study has shown that publicly owned railways deliver the best value for money as the profits and shareholder dividends are stripped out of the equation."

He argued that longer rail franchises really meant "ring-fencing the profits of the private sector while passengers pay through the nose to travel on overcrowded trains on poorly maintained tracks.

"The private train operators, which have ripped off £2 billion from the railways since privatisation, are being handed a one-way ticket to the bank by the Con-Dems."

And Transport Secretary Philip Hammond refused on Thursday to rule out a train ticket price increase of up to 10 per cent.

Mr Hammond insisted that he was committed to "fair fares" but said it would be wrong not to consider whether the current pricing structure should be changed.

He has already indicated that the existing annual rise formula - whereby regulated rail fares including season tickets go up each January by 1 per cent above RPI inflation - may have to be changed.

During Commons question time, shadow transport minister Willie Bain expressed fears that it could be replaced with an RPI plus 5 per cent arrangement - meaning a likely rise of up to 10 per cent overall.