NEW powers for local councils to curb rail fares and help decide routes were demanded in a Governmentbacked report yesterday.

The study called for the Northern Rail franchise – which runs services across the North-East and North Yorkshire – to pioneer a fresh model of “devolution”

on the network.

Local transport leaders would be given greater say in decisions on fares, stations and links with local bus services and light rail, and in negotiations with a private train operator.

The shake-up is likely to be met enthusiastically by councils and transport authorities, which have repeatedly criticised the misery of overcrowding on local trains.

In a statement to MPs, Transport Secretary Philip Hammond said the idea was sensible, pledging to consider it when detailed proposals are outlined later this year.

Mr Hammond also attacked the 30 per cent profits made by a second train operator in the North – TransPennine Express – saying of a franchising shake-up: “We will ensure that taxpayers get their full share.”

However, the devolution proposals were overshadowed by other recommendations in the review, undertaken by former Civil Aviation Authority chief Sir Roy McNulty, which pointed to higher off-peak fares – and fewer staff.

Ministers are determined to tackle the problem of half-full trains from London to the North before the end of the evening peak – followed by near-riots in a scramble for seats on the first off-peak service, after 6.45pm.

At present, the peak fare from the capital to Newcastle is £289 – but it is less than half that outside those hours, at £110.70.

Meanwhile, unions were quick to condemn the review’s call for a fresh look at staffing and working practices and for pay restraint.

Tony Walker, spokesman for the North-East branch of campaign group Railfuture, said: “Instead of suggesting a more sensible, unified structure, McNulty has gone for the soft underbelly of the system – the operational staff.”

Sir Roy’s call for devolution in the North appears to mirror the approach in Merseyside, where Merseytravel – the transport authority – works in partnership with Merseyrail, the private operator.

The idea is for the new model to be introduced when Northern Rail’s franchise is re-let next year – and for merger with Trans- Pennine Express, when it is re-tendered in 2013.

The operators run services to Darlington, Durham City, Bishop Auckland, Chester-le-Street, Middlesbrough, Stockton, Hartlepool, Redcar, Sunderland, Harrogate, Newton Aycliffe, Redcar, Northallerton, York and Scarborough.