THE boss of GNER last night called on the Government to scrap unprofitable rail lines adding that regional services that run virtually empty could go "to hell".

James Sherwood, president of Sea Containers - parent company of GNER - became the first rail chief to publicly call for a root-and-branch re-examination of loss-making routes.

His calls reawakened the spectre of a new round of Beeching-style cuts to the network.

Poorly-used lines, including many in the North-East, could bring the industry to its knees because of the cost of supporting them, according to Mr Sherwood.

GNER runs the East Coast mainline service, and travellers between the North-East and London pay about £8 extra on a return ticket to subsidise loss-making lines.

About 400 stations in the UK network are used by fewer than 25 people per day. Some North of England lines require a subsidy of at least £1.60 per passenger for a ten-mile journey.

The level of Government subsidy for the rail network has risen steadily since privatisation and now stands at more than £4bn a year.

Speaking at a rail industry forum, Mr Sherwood said the time had come to re-examine loss making services. "We need to get the Government focused on trimming off the unnecessary bits that very few people use," he said.

"The railways could probably be profitable if you could get rid of a lot of services."

And he added: "We have got to get commuters and long-distance travellers to their destinations on time but to hell with freight and regional railways which are running around virtually empty."

His call for a repeat of the Beeching cuts - which saw the network cut by a third in the 1960s - came as Transport Minister Kim Howells promised a radical overhaul of the railways.

He said an end would be put to the "maddest" aspects of the industry's regulation which rewarded failure.

"I think the whole structure at the moment needs changing. It's a money-go-round and a bureaucracy which is crazy and we've got to get rid of all that," said Mr Howells.

He also criticised the "maddest manifestation" of the current structure where rail regulator Tom Winsor was effectively in charge of Government spending on the railways.

He indicated that a review on the way the industry is run - to be published in July - would reduce some of the powers of the regulator.

Arriva Trains Northern, which operates throughout the North-East and North Yorkshire, receives a subsidy per passenger kilometre of 14.5p.

A spokesman for the company said yesterday: "We deliver services and levels of subsidy set out by the Strategic Rail Authority (SRA) and have nothing to do with rail policy."

However, a spokesman for the SRA dismissed Mr Sherwood's stance as a "tired old argument".

He said: "Rising costs over the last few years are an issue but the way to solve it is not to close down large and important parts of the network.

"We have the benefit of a wider picture which includes the environmental, social and economic side of the railway. It is not all about the profit-and-loss account."