Byers given three days to explain Railtrack fiasco

Stephen Byers has been given three days to clear up the confusion over his denials that he pushed Railtrack into bankruptcy by withholding £162m in public support.

The Transport Select Committee chairwoman Gwyneth Dunwoody has given the Transport Secretary until Wednesday to put in writing his explanation for contradictions in the story given to her committee.

Mr Byers denied that he had withheld £162m from Railtrack before he sought the court order to put it under administration. Within 24 hours, his account was contradicted by Sir Alastair Morton, the chairman of the Strategic Rail Authority.

A leaked letter revealed that the SRA chairman had written to Sir Richard Mottram, Mr Byers's permanent secretary at the Department of Transport, Local Government and the Regions, to protest at delays in paying the money. In the letter, Sir Alastair said: "I do not suggest that the Treasury is blameless in this matter, but the primary responsibility must lie with your department."

Mr Byers was challenged about the letter by the committee. He said: "We certainly did not block a payment of £162m to Railtrack."

Tories on the committee demanded that Mr Byers should be brought back to answer further questions. Mrs Dunwoody ruled that no more oral evidence was needed but the committee confirmed it had written to Mr Byers asking him to clarify the issue before its inquiry is completed.

Railtrack's fall has proved popular with Labour MPs and the public, but the cost of compensation and the impact in the City is yet to be counted.