The plan is part of the Fourth Railway Package being promoted by the European Commission and recently considered by the European Parliament's transport committee in Brussels. The single European area would not be one ownership structure but a common framework of rules and regulations for rail operators in all EU countries.

In practice, the package should mean that a European Railway Agency will be able to issue EU-wide authorisations allowing trains to be sold and operate across all major rail networks. Another proposal is an EU-wide safety certification. Both these areas are at present administered by member states for their domestic networks.

Dr Bennion said: "This is a complex but necessary area of reform. Unusually, the British government with all party support is strongly backing the EU Commission against vested national interests from state railways in many EU countries.

"It is not about imposing fragmentation and the least satisfactory aspects of privatisation in this country. Instead the proposal is for a single process for safety and type approvals for new trains and a single set of rules for running train services, which despite nearly three decades of the single European market are still different in each EU country, causing huge extra costs for manufacturers.

"Potentially this should allow very large savings on both administrative and running costs for train manufacturers, operators and national regulators but also help new entrants into the marketplace. In particular it should help British companies access other European markets much more easily by opening them up to competition, as has already happened in the UK.

"So far Britain has done well in leading on this and I hope this continues in Council. Rail policy is an example where Britain is on the side of the pro-European argument, it shows we are not always the 'dog in the manger.'

"It is also good news for passengers if we can get this package agreed - making trains cheaper to run is the only way we can tackle the relentless rise in fares. It will also help the environment by making rail more competitive and encourage a further shift from road to rail.

"I am under no illusions that reaching agreement here is going to be difficult and take time and hard negotiation. But in a global marketplace and faced with growing cost and competitive pressures, it is time Europe's railway industry took full advantage of the world's largest network on the standard gauge."