British Transport Secretary Mr Stephen Byers drew intense criticism yet again yesterday after agreeing a £300 million (€487.7 million) taxpayers' bail-out for shareholders of the collapsed national rail network operator. The government said the money was not compensation and was needed to get Railtrack out of administration as quickly as possible.

But members of the Labour government's own party and the opposition Conservatives were unhappy at the move. The Conservatives accused Mr Byers of "a humiliating U-turn". He had promised that "no taxpayers' money" would go to compensate shareholders of the privatised rail infrastructure group after the government forced it into administration.

Railtrack's problems began with a fatal derailment at Hatfield, north of London, in 2000. That was caused by a crumbling rail and exposed a maintenance crisis on the network. As delays and maintenance bills mounted, the company was put into administration despite insisting it was still solvent.

The £300 million is part of a bid to acquire Railtrack initiated by a non-profit-making company limited by guarantee, which was named Network Rail.

As well as getting £300 million in a government grant, the new company is raising £200 million from institutional investors. This total of £500 million is an "early exit" payment to the Railtrack Group dependent on Railtrack's administration period being ended by late July rather than as estimated months later.

Added together with assets worth around £800 million, this would enable Railtrack to pay its 250,000 shareholders about £2.50 per share.

Shares, which were at one time as high as £17, were suspended at £2.80. Mr Byers said the money was "good news for the travelling public" because the money would get the company out of administration much sooner than expected.

The original timetable of three to six months had already been extended to more than a year.