PASSENGER groups warned last night of a threat to fares if a new safety charge is imposed on train operators.

The Government is proposing a single levy to pay for the work of the Health and Safety Executive's (HSE) railway inspectorate - potentially costing the industry an extra £9m a year.

The HSE requires a big increase in funding if reforms aimed at boosting safety, as recommended by Lord Cullen's inquiry into the Ladbroke Grove rail accident, are to be implemented.

A levy would replace the current funding system, which consists of a combination of hourly charges for work and Government grants.

The Department of Transport says train operators could meet the extra costs by applying for increased funding from the Strategic Rail Authority (SRA), but accepts that some costs may be passed on to passengers.

Last night, Ernie Preston, secretary of the North-East Rail Passengers Committee, said he was concerned that off-peak fares, which are not subject to Government regulation, could be hit.

He said: "I don't believe the money exists within the SRA to meet any extra costs incurred by the train operators.

"Rather than expanding the network, they are cutting back some schemes at the moment.

"I hope there will be more consultation over this before it progresses much further."

The proposal is included as a clause in the Railways and Transport Safety Bill, allowing the Secretary of State for Transport to make regulations to provide for a levy under the Health and Safety at Work Act.

It has already had its first reading in the House of Commons and could become law by the end of the year.

Supporters of the levy say it would enable train operators to budget much easier and avoid unexpected costs caused by accidents. It would also place the financial burden back on the railway industry, which creates the risk.

The Bill states: "There is ample justification for the industry to bear the cost of future rail safety work undertaken by the HSE to a greater extent than is possible under the existing charging regime."

Exact details as how the levy would work and the amount to be raised are still to be worked out.

A spokesman for rail operator GNER would not comment on the levy, but said it had submitted a response to the Association of Train Operating Companies, which is carrying out a consultation over the move.

The Bill contains provision for a stand alone rail accident investigation branch and modernisation of the British Transport Police.