It has been a terrible few weeks for those who use Britain's railways. Shutdowns on Boxing Day infuriated many passengers, then prices rose ahead of inflation and last week the new £9bn West Coast main line between London and Glasgow was struck by a series of power failures. This is hardly encouraging, especially when trains are the most environmentally sound method of travelling around Britain.

The West Coast line, unveiled in its upgraded state less than a month ago, is supposed to allow an extra 1,000 trains to run a week at a new top speed of 125mph. Instead of experiencing such luxury, thousands of cold and stranded commuters went nowhere.

Network Rail, in charge of the track, blames faulty overhead power lines. But Virgin Trains, which operates the London to Glasgow route, argues the underlying cause could be simpler to identify: Britain's aging rail network cannot cope with the demands being placed upon it.

Virgin has a point. Last year, there were more than 1.2 billion journeys on the railways, almost double that of 1992, two years before the privatisation of British Rail began. In the next five years passenger numbers countrywide are expected to increase by another fifth. All this takes place on a limited network. In the 1960s, after the controversial Beeching report, a quarter of Britain's railways were torn up. With 25% less track and such burgeoning passenger numbers, it's no surprise the system is beginning to fail. The operating companies say that on the current network they cannot do any more to make trains run on time.

Privately, Network Rail agrees that it's time to stop tinkering and make bold changes. Less than half the network is electrified, which means many passengers still rely on dirty, slower and less efficient diesel trains. Additional lines are required. Gordon Brown spoke in this newspaper of the need "to build tomorrow today". Here is his opportunity.

For there comes a point when passengers refuse to pay for bad service, and many will reach it with the latest rise in fares. Rail companies already sense the coming decline in numbers. As Observer Business reports today, the big operators are to ask Geoff Hoon, the transport minister, to let them reduce services as passenger growth declines. What may be a wise tactic during the slump is not a strategy for the future. And passengers will return only if there is a better rail network.

A decision should be made about what sort of railway network we want and who should pay for it. Not passengers, who have little tolerance for further fare rises.

Travelling by rail in Germany, Switzerland and Holland is more pleasant and cheaper than in Britain because those countries offer far greater levels of public subsidy. Given the dire state of the government's finances, it would be unwise simply to throw money at this problem. Yet, at a time when public money for the railways is diminishing, subsidies for drivers and air passengers remain in place. Duty on car fuel has been frozen while aviation fuel is not taxed at all. Since rail travel is demonstrably better, both socially and environmentally, this makes no sense.

This week we expect to hear that a third runway at Heathrow has been given the go ahead. The Observer has argued against the expansion, but if that battle is lost, Gordon Brown must transfer the subsidies enjoyed by motorists and air passengers to the rail network.

The Tories' plan for a direct 180mph rail link between London and Scotland is a good one. While it would cost at least £15bn to build, it should draw passengers off domestic flights, an increasingly reprehensible way to travel.

The prime minister spoke of the need to make environmental investments in response to the economic downturn. A new high-speed rail link, built before the new runway at Heathrow is completed, would be a good start.