SHARES in Railtrack leapt sharply on their first day of trading in London yesterday to give the average private shareholder an immediate profit of over £100 sterling as investors shrugged off renewed Labour threats to curb returns and impose tighter regulations on the privatised British railway system.

Analysts reported strong demand both from institutions and private investors keen to top up their holdings. The company has taken over the ownership of British Rail's stations, track and signalling. Some 60 per cent of Railtrack's 11,000 staff applied for shares, the company said.

The shares started trading at 223p, 23p higher than the 200p first instalment from institutions. Private investors made a first payment of 190p for their shares. They rose to a mid morning high of 237p, and after falling back to 216.5p rallied to close at 220.5p. A total of 162 million shares were traded, which, allowing for the double counting of sales and purchases, amounted to 16 per cent of Railtrack's total equity.

The close represented a 16 per cent increase for private investors and a 10 per cent rise for institutions. Private investors who received the average allocation of 350 shares were sitting on a paper profit of £106.75p before dealing costs at yesterday's close.

"The shares started above our' expectations. We had forecast 210p-215p," said Mr David Myrddin Evans of Kleinwort Benson. "There are plenty of incentives for investors to hang on' until the dividend payment (in' March) but in the longer term there are political uncertainties."

The main sellers of Railtrack shares were smaller institutions which had had their applications scaled down and which did not want to build up larger holdings.

However, the British Labour Party continued its attack on the flotation. "Labour will not allow the misuse of taxpayers' money," said Ms Clare Short, transport spokeswoman. "It will use the power of regulation, subsidy and ownership to ensure that the travelling public gets the railway network Britain needs."

But Mr Robert Horton, Railtrack chairman, said the company already had to work within a very tight regulatory framework.