DEMANDS that the Scottish Government be given greater powers over how it runs Scotland's railway have been rejected by Westminster, provoking a furious response from the SNP.

UK Transport Secretary Justine Greening claimed it would not be sensible to break up what she said was a coherent GB structure and insisted the power of Scottish ministers to set fares and specify services was adequate.

Her refusal follows calls by the SNP to alter UK-wide rail legislation to allow for reforms to be introduced in Scotland. It also comes amid protest over how the Department for Transport handled a rail franchise award that saw Virgin Trains replaced by First Group as West Coast Mainline franchisee.

Ms Greening's response is contained in separate letters written to Infrastructure Secretary Alex Neil and Keith Brown, his Transport Minister, which have been seen by The Herald.

Power to modify fares and specify services through the ScotRail franchise – which accounts for more than 95% of passenger services north of the Border – has already been devolved to Scotland.

However, the SNP has complained more radical reform of the railway, such as reintegrating track and train companies that were separated during rail privatisation, is prevented by these laws.

As such, it would be possible for foreign state-owned rail companies such as Deutsche Bahn to bid to run ScotRail but impossible for the Scottish Government to set up a company to enter the same competition, the SNP has complained.

However, in a letter to Mr Neil, Ms Greening said: "It would not be sensible to run the railway in such a way that the Scottish Parliament could overturn the framework that governs the operation of passenger services on a GB basis.

"Our policy is to maintain a unified, national rail network but one that is subject to appropriate oversight by the Scottish ministers. This is what the current system achieves."

The response was criticised by Mr Brown, who said: "Our ambition to revolutionise rail services in Scotland is severely restricted by existing legislation.

"Although we are investing vast amounts of funding in the sector, we don't have enough influence over how railways here are operated, managed and regulated."

Mr Brown claimed the decision was also at odds with the UK Government's own consultation on rail services, which found passengers would benefit from decisions being made locally.

However, Richard Baker, transport spokesman for Labour, said both the SNP and Coalition responses were uninspiring.

He said: "This is a fairly uninspiring response to a fairly uninspiring letter. Alex Neil couldn't help himself from making this a constitutional fight without thinking about what is best for Scotland using the extensive additional powers on railways Labour devolved to Scottish ministers in 2005.

"Those who try to confuse radical changes on railways with independence are making a big mistake. We need both governments working together to deliver the best deal for passengers travelling across Britain."

Mr Baker said a not-for-profit model for running trains in place of the current franchise system should be considered but said this was not ruled out by current legislation.

Transport Scotland, the Government agency responsible for rail services, had undertaken considerable work on radical reform of the railways prior to the publication of a major consultation, Rail 2014.

However, the consultation document confirmed more radical proposals had not been considered possible due to UK legislation.