MAXIMISING earnings for shareholders is a necessary function of businesses in the private sector.

It is a task which helps companies attract funds for investment and, in turn, enhances profitability and creates even better returns for shareholders.

It is a virtuous circle which is at the very heart of capitalism.

Unfortunately, when there is a conflict between profit and public safety, the virtuous circle is broken.

To give Railtrack the benefit of making profit from hiring out the railway lines and also the duty of maintaining safety on those railway lines, was a fundamental flaw in the privatisation of British Rail.

On the one hand, Railtrack is under pressure from shareholders to grow profits and dividends. On the other, it is under pressure to increase maintenance and safety measures on the tracks.

The tragedies at Paddington and Hatfield and its subsequent mishandling of the network, has lost the public's faith in Railtrack's ability to resolve the conflict of interests.

The public's perception is apparently supported by Railtrack itself, which yesterday pleaded guilty to a charge of "over-promising and under-delivering''.

Unfortunately, the Government appears to retain a misguided faith in Railtrack, or is unwilling to face up to the fundamental problem.

Instead of being punished for its failings, Railtrack is being rewarded by the release of £1.5bn from Government coffers five years ahead of schedule.

To have a "passengers' champion" on the Railtrack board as a condition of handing over the money will not cause directors to change priorities.

The prospect of a lone independent voice on the board matching the clout of City institutions with shares in Railtrack is ludicrous. The appointment is little more than a public relations gimmick.

The time has come for the Government to take decisive action; to acknowledge the failings of the privatisation blueprint and strip Railtrack of its responsibility for safety.

To hand over billions of pounds of taxpayers' money to Railtrack without any effective control over how it is spent, is a dereliction of duty by the Government.