THE operator of the "Harry Potter" steam train has warned its future could be threatened by new charges facing rail tour companies.

West Coast Railways, whose Jacobite service was immortalised in the filming of the JK Rowling books, said it would struggle to absorb proposed compensation payments to other companies if one of its trains broke down.

Under the existing system, charter train operators are only liable to pay up to £5000 in penalties for each incident which leads to delays for other passenger train services.

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But the Office of Rail Regulation (ORR) has proposed removing this cap, bringing charter firms into line with other rail firms.

James Shuttleworth, WCR's commercial director, said the proposals represented a grave threat to a booming tourism industry that brings 7000 visitors a day to the western Highlands at the peak of summer.

When the company took over the steam-hauled Jacobite in 1994, it operated tours four times a week in the summer peak from June to September between Fort William and the fishing port of Mallaig.

Following a surge in bookings, it now operates seven days a week from mid-May to the end of October, with two services a day.

Mr Shuttleworth pointed out that compensation payments for train operators could regularly run into tens of thousands of pounds for single incidents – especially if breakdowns occurred on busy junctions used by passenger services.

"If an operator was prepared to open themselves up to unlimited liability it could have a profound effect on their business. It would have the ability to bankrupt them overnight," he said.

He added he was hopeful that the rail regulator could be persuaded to change its mind and impose an alternative compensation system that would not be so damaging to tour operators, but said the case had still to be accepted by officials.

Other rail tour firms have voiced similar concerns, including the Railway Touring Company – the charter promoter run by Nigel Dobbing, who recently told Rail magazine that, if the ORR's proposals went ahead: "I don't think there will be any charters. We wouldn't be able to afford them."

Much of the Jacobite's success has been put down to its role in the Harry Potter films, where it was filmed taking young wizards from Platform 9¾ at King's Cross Station to the Hogwarts School of Witchcraft and Wizardry, usually via the scenic Glenfinnan Viaduct, which the Jacobite also traverses on its WCR tours.

Tourism agencies have hailed its economic impact on the Highlands, where it has provided a steady stream of visitors who have had a knock-on benefit for restaurants and other tour operators.

Frank Roach, partnership manager for Highlands transport agency HiTrans, said: "The Fort William to Mallaig steam operations are incredibly successful and extremely valuable to the economy of the west Highlands."

Mallaig has been a particular beneficiary, which has been transformed from a village struggling with the effects of a road bypass into a thriving tourism magnet, Mr Shuttleworth said.

However, other train operating companies can be less keen on charter operators, complaining the steam and older heritage diesel locomotives they use are more prone to breakdowns and can affect ordinary rail services.

"Charter companies can be the bane of our lives, especially if you get one stuck on the line with passenger services behind it. There's no reason they shouldn't pay the same compensation as other rail companies when their trains break down," one industry source said.

A spokesman for the ORR said the proposals to remove the compensation cap were part of a consultation with responses still being considered. It has been calculated that charter operators would be expected to pay £660,000 a year if they were implemented.

A spokesman said: "Passengers and customers care about disruption to their service.

"It is therefore important the regulator ensures that Network Rail and train operators are incentivised to work in the best interests of passengers and customers by avoiding disruption."

A spokesman for Network Rail, which owns and operates the UK's track and signals, said: "We agree with the view that the current cap on charter operators should be lifted, but it will be for the regulator to decide what the best option is following its consultation process."