Labour has warned against returning to the “dark days of Railtrack” as it emerged that senior rail industry leaders have been exploring the breakup and privatisation of Network Rail.

Freshly published minutes of a November meeting of the Rail Delivery Group (RDG), which includes train operators and Network Rail, show that executives discussed privatising the rail infrastructure along the lines of utility firms.

Unions fear Network Rail facing privatisation amid budget crisis Read more

The government commissioned an independent review of Network Rail’s structure and financing to be conducted by Nicola Shaw, the chief executive of HS1, after spiralling costs led to the shelving of promised rail upgrades in its £38.3bn five-year plan last June. Shaw is due to report in time for a potential announcement by George Osborne in the 2016 budget.

In discussing its own submission to Shaw’s work two months ago, train companies suggested that the privatisation of utilities companies was a precedent to follow, arguing that routes needed to be removed from Network Rail’s control.

However, moves to privatise the infrastructure would be highly controversial given the experience of the late 1990s, when a series of disasters occurred under the Railtrack regime.

Shaw’s initial scoping report set out options that ranged from “full privatisation to full nationalisation”. Network Rail’s chief executive, Mark Carne, has proposed devolution of many functions to regional route managers. But others at the RDG favoured a full breakup, arguing that his plan could fail to “attract investors if the centre was still holding control”.

The minutes say that the group – which included the bosses of most UK train operators, as well as Carne – “explored the issue in more detail, considering the privatisation of utility services and London Buses, and the UKFI, as alternative models, and the various funding options available”.

Lilian Greenwood, Labour’s shadow transport spokeswoman, urged the government not to repeat the mistakes of Railtrack.

“There are areas where Network Rail needs to improve but more fragmentation and more privatisation are the last thing that passengers need. Selling off our rail infrastructure shouldn’t even be on the table but the government is actively deciding whether to press ahead,” said Greenwood.

“Such a policy risks dragging us back to the dark days of Railtrack when passengers’ safety was endangered and the country’s network ground to a halt. The Conservative party tested the theory to destruction 20 years ago but it seems that they have learned nothing from the mistakes of the past.

“If rail services are to improve then we need more public ownership, not less. Ministers must reject these calls from train companies and rule out the privatisation of Network Rail.”

The RDG’s eventual submission to the Shaw review did not take a formal position and said there was a range of views expressed by members, but it included a proposal for a partial sell-off of a section of the rail network in England to test the water.

It stated: “There are options for early sale of an English route … Such a sale would introduce an alternative source of finance and greater local focus on customers, clients and stakeholders as well as creating a truly independent comparator which could help to create more effective incentives for improvement in the remaining routes. Following any initial sale, it would be possible to sell further routes but a decision on this could be made in the light of progress and results.”

Paul Plummer, the chief executive of the RDG, said it was right to consider how best to manage the railway infrastructure.

“Nicola Shaw has set out the sale of Network Rail routes as one of many options she is considering as part of her review and our members have therefore discussed its merit.”

“Train companies support the plans for devolution already set out by Network Rail as a way to increase accountability, but also believe it’s important to retain the benefits of a single national network. There is a broad range of views among our members about the appropriate pace and extent of any further change beyond those already set out by Network Rail,” Plummer added.

While the privatisation of utilities such as water and electricity, which were split up into private sector firms in the early 1990s, caused controversy over higher tariffs, the safety record associated with similar moves in rail has made it potentially even more politically fraught.

Network Rail was established after the brief and disastrous tenure of Railtrack between 1996 and 2002, which went into administration after a series of fatal accidents culminating in the Hatfield disaster in 2000. Railtrack was also criticised for mismanagement that was most spectacularly shown in the £9bn upgrade of the westcoast mainline, more than three times its original budget.