The government will reduce taxpayer contributions to the railways in Britain by £3.6bn a year before 2019, in a move which rail groups and unions fear will lead to job losses, the closure of hundreds of ticket offices and higher fares.
Transport Secretary Justine Greening told MPs that she was accepting the recommendations of Sir Roy McNulty in a report published last year. "We need to tackle the problem of our inefficient railway," she told MPs.
The McNulty report claimed that some ticket offices in smaller stations should be closed, peak fares should rise even faster than inflation than at present, and that overall costs in the railways should be reduced by a third.
This has seen transport unions warn that accepting the proposals would lead to thousands of job losses.
It's thought that the reforms could lead to more than 600 smaller ticket offices in England and Wales being closed.
The RMT and TSSA unions both believe that 12,000 raliway workers' jobs could be under threat under the reforms.
Greening said she favoured giving the train operating companies greater control over the network, along with Network Rail's regional offices having a bigger say over the operation of the railway lines. She also outlined plans for "smart ticketing", which would be the nationwide roll-out of a scheme similar to the Oyster card service which runs throughout London.
The Oyster card has been blamed by unions for the reduction in staffed ticket offices throughout the capital, but allows passengers to set up an 'auto top-up' which takes money straight from their bank accounts as they pass through the barriers at railway stations
Some believe that the cuts to the network are borne out of a need to divert funds to the government's controversial HS2 line, to be built between London and Birmingham in the first instance, and later to run further north. The head of the Office of Rail Regulation speculated that the changes were because of HS2 in a recent letter to the Financial Times.
Labour accused the government of putting the concerns of private train companies before passengers.
Shadow Transport Secretary Maria Eagle branded the decision "a dangerous experiment" which could lead to the break-up of the railway system. She accused Greening of passing the burden of cost to the fare-payers, rather than the train operating companies, which she claimed were making "huge profits".
Justine Greening said she accepted that passengers valued face-to-face ticket officers, but insisted that Labour also cut their opening hours while in office. She added that she was looking at ways of allowing people to buy train tickets at libraries, post offices and other local shops.
She insisted she wanted to "move ticketing into the 21st Century," to foster an approach where options for buying tickets were more in touch with people's lifestyles.