The woman spearheading Labour's emerging vision to put the people back in charge of the railways recently had cause to take direct action of her own. On an overcrowded and late CrossCountry train limping its way from Plymouth to Newcastle, with its air conditioning failing and litter piling up, shadow transport secretary Mary Creagh led a mini-invasion of a first-class carriage by disgruntled passengers. Not in a George Osborne way, she stresses. Unlike the chancellor, who attempted to secure an upgrade on a Virgin train without paying, she urged the conductor to declassify the first-class carriage in order to get seats for all.

The bigger prize for Labour will be to get voters to agree to break down the boardroom doors of the private train operators. Creagh says: "We've got a very ambitious policy. I think this is going to be the biggest shakeup of the railways since privatisation in 1993."

After Ed Miliband's pledges to limit energy prices, some Labour voters expect a similarly bold approach to rail. Critics of the current system point out that private shareholders reap dividends off the back of huge public subsidy, with fares continually rising while the taxpayer contributes a grant roughly double the amount pumped in during British Rail's day.

Its defenders say our trains are the envy of Europe, with booming passenger numbers, a vastly improved safety record and investment coming with only slim average profit margins – around 3% on average – for train operators.

Creagh says: "Are we getting value for money for the taxpayer? I don't think so. Train companies have made a lot of money in the past without improving the passenger experience." She is coy about naming the culprits, however. "I'm in the business of working with companies and Network Rail to make things better."

The exact form and level of Labour's ambition remains to be seen, but the policy will probably include fare caps, franchise overhauls and a green light for public sector companies that want to bid to run rail lines.

The fares cap last week pledged by Miliband would only abolish the "flex" – allowing operators to increase prices on certain routes while keeping within an overall average – which still means fares rising 1% above inflation unless Labour gets bolder when the level of 2015's fare rises are announced this month.

So will it be similarly bold about who runs the trains and where the profits go? East Coast has been a success under the management of the state-owned Directly Operated Railways, which inherited the franchise after two private operators in succession – GNER and National Express – handed back the keys. It has fuelled campaigns to take other lines back into the public sector as franchises come up for renewal, which would be tantamount to renationalisation without much political fuss. Little wonder the coalition has hastened to return the London-to-Edinburgh line to private hands, with the franchise to be awarded this autumn, before the election.

Labour says public-sector companies – possibly mutuals or co-operatives – will be allowed to bid in future on a level playing field with private bidders. In parts of the rail industry, that idea has caused head-scratching and sparked phone calls to lawyers. One director of a privately owned rail operator said: "Bidding is an unbelievably complicated and expensive process. How will the public take the idea of spending millions on bids they might lose?" Another well-placed source said: "It's going to be incredibly difficult to pull off making this run fairly where you've got someone the taxpayer is backing against the private sector."

Martin Griffiths, chief executive of Stagecoach – co-owner of Richard Branson's Virgin Rail Group – and chairman of industry body the Rail Delivery Group agrees. "As yet, there is no detail on how the idea of a public-sector bidder would compete on a level playing field with private-sector bidders when government is both referee and player in the competition for franchises."

Creagh concurs that there needs to be a separate legal entity. But she says: "There's got to be a better way. Is this the way to run the railway? We've been polishing it and polishing it and every time something goes wrong."

The bidding process would have to change under the promised full review of the franchising system. Creagh hints that, under Labour, rail operators could expect an end to risk-and-reward deals in favour of the kind of management contracts drawn up to keep trains running when the government's franchising timetable disintegrated after the west coast fiasco in 2012.

That farce saw Virgin Rail stripped of the franchise, which was handed to FirstGroup, only for Virgin to be given it back when flaws were discovered in the bidding process. "The traditional model is the bidder taking revenue and cost risk, but east coast showed us what happens when the revenue collapses. You either break the company, in the case of GNER, or you risk destroying the company and they walk away," she says, referring to National Express breaking its £1.4bn contract to run the line in 2009.

Privatisation "delivered the disaster of Railtrack" she says, while the fallout from the west coast debacle has cost the taxpayer more than £200m. High on Labour's list too is another vagary of the current system, where trains are leased from companies owned by banks. "We want to tackle the rolling-stock market, where some companies have been making 30% profit margins on trains that were paid for by the taxpayer 20 years ago."

Senior industry figures are split over whether to fight what may be the next government's plan. Some argue privately that Labour's attempts to square its policy with the more far-reaching desire for renationalisation harboured by many, including its trade-union backers, has rhetorical bite but will founder on the detail.

On the left, the expectations are also muted. Mick Whelan, general secretary of Aslef, says: "We would prefer far-reaching reform. They will never go far enough for us, obviously: our goal would be public services run by the government for the good of the public. There seems to be an inherent fear of alienating the business community. We are interested in legislation that would bring wheels and steel back together."

If that means a government body running track and trains, says Creagh, it would be "a step too far for me". She says: "I want to see evolution, managed change. We had revolution 20 years ago, it was a disaster. Another one is not what railways need."