Rail fares could rise by as much as 30% to 40% over the next four years as a result of changes to subsidies to be announced next week, it has been claimed.
Transport Secretary Philip Hammond is known to want to continue investment in the railways and is not ruling out fare rises to help pay for it during a time of retrenchment in public spending.
He has told train operating companies that the formula by which regulated rail fares are set may have to be changed, effectively cutting their subsidy from the public purse.
About half of fares are regulated, including popular commuter routes, season tickets and long-distance off-peak journeys - a total of about 600 million tickets a year.
They currently increase at the start of each year by the previous July's RPI inflation rate plus 1%. With RPI at 4.8% in July, that would already mean a 5.8% hike in the cost of tickets from January. Channel 4 News suggested that the formula could be increased to RPI plus 3% - or as much as RPI plus 5% on some routes.
The programme quoted an unnamed industry source as saying that this could mean fares increasing by nearly 40% by 2015. And it suggested that typical commuter season tickets between Brighton and London could increase from £3,104 a year to £4,260 by 2015 and between Swindon and London from £6,640 to £9,130.
Any increased income arising from a change in the formula would go to Government coffers, rather than to rail companies.
Official sources declined to make any comment on the scale of any possible possible change to the formula, which would be announced in Chancellor George Osborne's Comprehensive Spending Review on Wednesday.
Mr Osborne asked the Department for Transport to prepare for cuts of anywhere between 25% and 40% to its annual budget of £15.9 billion.
Unlike the NHS and international aid, transport does not enjoy protection from cuts in the CSR and pressure on the DFT budget has been increased by political decisions to rein in reductions in spending on defence and schools.
