BBC NEWS | Business | Network Rail closer to Railtrack takeover

European regulators have paved the way for the takeover of Railtrack by Network Rail, almost a year after the railway network was forced into administration.

The European Commission has approved the sale of Railtrack's stake in the Channel Tunnel rail link to London & Continental Railways, a state-backed consortium.

The move marks the first stage in the insolvent railway company's exit from privatisation after six years as a publicly listed company.

The government said the next step was to apply to the High Court to have Railtrack's operations handed over to Network Rail by early October.

A happy ride?

Transport secretary Alistair Darling said the EU clearance meant "we are one step closer to new ownership of Britain's rail network and all the benefits that a better management structure will bring".

The Commission approved a state aid application to buy Railtrack's share of the first stage in the high-speed Channel Tunnel rail link.

The state-backed London & Continental Railways consortium is paying �295m for the asset.

Network Rail has already entered into a separate �80m agreement with L&CR for the right to operate and maintain the link and to manage the St Pancras station in London.

Network Rail said the EU's agreement over Channel Tunnel rail link asset did not relate directly to its plans to buy Railtrack.

But Network Rail said: "It does satisfy a significant outstanding condition contained in the circular to Railtrack Group shareholders, which treats the two transactions as inter-conditional".

Railtrack shareholders approved Network Rail's �500m takeover of Railtrack in July 2002, after the company was forced into administration in October 2001.