Outlook: Political fix leaves Prescott up the junction

IF GERALD Corbett can't take the politics, then he should never have jumped on the footplate in the first place. Railtrack has become Britain's most politicised company but even its punch-drunk chief executive must have been left gauping at the latest fix dreamt up by the Millbank machine to stop Ken Livingstone in his tracks.

Decisions do not come much more political than that which was sheepishly slipped out on Tuesday night by John Prescott to the effect that Railtrack has been barred from taking over part of the London Underground.

With one deft move, Labour's spinmeisters hope they have shot Red Ken's fox by neutralising Tube privatisation as an issue in the forthcoming London mayoral elections. Not only has Mr Livingstone lost a potent and populist issue to campaign on, but Labour's preferred candidate, poor old Frank Dobson, no longer has the embarrassment of having to run on a blatantly pro-privatisation ticket.

Why else would Mr Prescott execute such a U-turn, barely two weeks after signing a heads of agreement with Railtrack giving it exclusive rights to negotiate a take over of the three sub-surface underground lines? As luck would have it, Sir Alastair Morton's Strategic Rail Authority has provided a fig leaf for Mr Prescott. The Deputy Prime Minister says his decision was based on the SRA's assessment that Railtrack would not be able to come forward in the time allowed with proposals to integrate the national rail network and Tube system.

Pull the other. In ditching Railtrack, Mr Prescott has undermined the credibility of his Private Public Partnership for the Tube. Another contractor will not be found to take on the sub-surface lines for at least a year - meaning another pounds 400m on the PSBR - while the prospects of finding private sector funding for the infinitely more problematic deep tube lines begins to look even slimmer.

For the sake of a short-term political fix, Mr Prescott has further undermined Railtrack and made it that much harder to attract desperately-needed investment into Britain's crumbling public transport system.