UNDER-fire York engineering firm Jarvis Rail was reeling today after almost £50 million was wiped off the company's value in stock market trading.

Shares slumped by 12 per cent, falling 35 pence to 252.5 pence in early trading following claims the company falsified track work documents.

That followed the news that Network Rail was investigating the company over allegations that records of substandard rail work were falsified.

Strategy director David Clarke, representing the York-based company at the House of Commons Transport Committee, told MPs it was staying in track renewal, but abandoning maintenance work because it "does not attract the same reputational problems as maintenance". The company, which is at the centre of investigations into the Potters Bar rail crash, was fending off new claims today after Network Rail revealed it was investigating whether Jarvis entered falsified documents over track work on the West Coast Main Line. The allegations relate to work being carried out on the line between Stoke and Macclesfield. Jarvis said it laid some of the track incorrectly, leading to speed restrictions being introduced this week. But it has denied the claims of impropriety.

A Jarvis spokesman said: "Jarvis takes the allegations of document falsification extremely seriously and is investigating them but, to the best of its knowledge, these allegations are without foundation.

"The investigation will be concluded as quickly as possible and a further statement will be made in due course."

At the transport committee, Mr Clarke had to face tough questioning, which was led by the committee's chairman, Gwyneth Dunwoody.

Mr Clarke said Jarvis had decided to pull out of mainline rail maintenance "because the returns available were not sufficient to counterbalance the risk that is inherent in rail maintenance".

Updated: 14:03 Thursday, October 23, 2003