The British government's plan to revive the country's railway system through the non-profit-making Network Rail will fail unless it is prepared to provide the necessary financial guarantees for the new company to raise the billions it needs from the capital markets, bankers and analysts said last week.

An announcement on March 25 said that the government would provide a controversial GBP500 million sweetener to bring the Railtrack administration to an early end and enable Network Rail to take over the assets.

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