LABOUR is poised to announce that, if it comes back into power, it would seek to change the law to enable the partial renationalisation of Britain's railways.

The Coalition Government promptly denounced the move as a short-term gimmick conceded by Ed Miliband at the behest of the rail unions.

Under the proposal, public as well as not for profit firms would be allowed to run train services alongside private ones like Virgin and Stagecoach. The leak has come on the eve of the party's weekend National Policy Forum in Milton Keynes when the leadership was expected to come under intense pressure to endorse a policy of full renationalisation in the run-up to the General Election.

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It is thought the Labour leader has had a number of meetings with the heads of the transport unions like Aslef, TSSA and Unite and that a compromise motion has been drawn up.

This criticises the chaotic franchising system of recent years and insists the current system is neither fair to passengers nor taxpayers.

It calls for a legal right for passengers to get the cheapest tickets and for annual caps on fare rises and states the next Labour Government will "devolve decisions over the running of regional and local services, including to Scotland and Wales, so that areas can bring together trains, buses, ferries and trams into a single network".

The East Coast Mainline between Scotland and London is run by a public company, set up when the private firm running it announced it could no longer deliver the service.

But the Coalition has said it wants another private firm to run the service by the end of the year.