RAILTRACK in York was today moving towards a new era following the announcement of a deal for shareholders offering them 245p to 255p a share.

The deal involves not-for-profit company Network Rail, which is buying Railtrack plc out of administration for £500 million.

The TSSA union, which represents many Railtrack employees in York, said there was now a chance for the railways to emerge from the limbo they had been in since the company's collapse.

"It will mean an end to the uncertainty of being in administration," said a spokesman. "We will have a company in place that will look after the interests of passengers rather than shareholders."

Railtrack is thought to have many shareholders in the York area, with many employees having been given shares at the time the company was created, and the TSSA welcomed the fact that members who were shareholders would get some money back, when at one stage it had looked as if they would get nothing.

City Labour MP Hugh Bayley said the deal, if accepted by shareholders at a meeting next month, would enable the railways to move forward in a new period of certainty after all the uncertainty since Railtrack went into administration.

"The highly-talented rail engineers and workers in York can tackle the problems left by Railtrack with track and signalling," he said.

But Ryedale's Tory MP, John Greenway, said the uncertainty need never have happened in the first place, and attacked the "crass" handling of the whole issue by the Government.

"Who created the era of uncertainty? We have had nine months of paralysis, and if the person responsible for all this, Stephen Byers, had still been in office, this would have been his final humiliation."

Mr Greenway said it seemed logical that the new not-for-profit company Network Rail would run things more efficiently, but he was not yet convinced it would deliver. "The jury is still out. But it has got to work."

Asked whether shareholders should accept the offer, Mr Greenway said: "My advice, particularly in the present climate, would be to take it."

Mr Bayley said it was up to shareholders, but added: "I have had hardly any shareholders from York complaining to me about what has happened."

Under the deal, shareholders will have to wait until about January 2003 for the first instalment - of around £1.60-£1.80.

And if they do not want to wait, they will have to take their chances on selling on the stock market. Trading in Railtrack shares reopened today.

Railtrack shares, which were once as high as £17, were suspended at 280p when former Transport Secretary Stephen Byers forced Railtrack plc into administration last October.

Today's deal also involved the London & Continental Railways company paying £295 million for the first phase of the Railtrack-owned Channel Tunnel high-speed rail link, with Network Rail paying £80 million to operate and maintain the link. After days of delay the deal was finally announced by Railtrack Group.

Updated: 11:45 Thursday, June 27, 2002