Network Rail is to take another step towards renationalisation by stripping its contractors of responsibility for some key upgrades and taking much of the work in-house.

More than 250,000 passengers had journeys disrupted by the four-day overrun at Rugby and a similar 24-hour stoppage at Liver-pool Street station in London after Network Rail admitted that it was caught by surprise when projects overran badly over Christmas.

The Times understands that contractors are likely to be removed from the role of overseeing schemes and could eventually lose much of the £2.5 billion of work commissioned by Network Rail each year.

The move would be the latest step in the creeping renationalisation which began in 2001 with the Government’s decision to replace Railtrack with Network Rail, a public interest company with no shareholders. In 2003, Network Rail announced that it was sacking all its maintenance contractors and bringing 15,000 staff in-house to carry out day-to-day repairs.

All major upgrades are still done by contractors, but Network Rail yesterday signalled that it was reviewing their future role with a view to doing more work itself.

Iain Coucher, Network Rail’s chief executive, is understood to be furious with Bechtel, the coordinating contractor for the upgrade at Rugby. The project should have been completed by New Year’s Eve but overran by four days, severing the West Coast Main Line and forcing more than 50,000 people a day to catch replacement buses. The contractors failed to supply enough qualified engineers to replace overhead lines, forcing Network Rail to step in and take over from Bechtel on New Year’s Eve.

A senior Network Rail source said: “We are absolutely seething about some of our leading contractors, notably Bechtel, which completely failed to deliver on repeated promises given before Christmas.

“This episode calls into question the future role of contractors and one of the options is to take more of the work in-house. When the model of using an outside project management company fails as badly as this, we have to ask very tough questions.” Other contractors who may lose work include Jarvis, Balfour Beatty, Amey and First Engineering.

The Rail Regulator is investigating what went wrong at Rugby and also at Liverpool Street, used by more than 200,000 passengers a day. The regulator is likely to fine Network Rail several million pounds, though it is unclear what effect this will have as the company is dependent on public subsidy and reinvests any profits in the network. Network Rail will also pay millions of pounds in compensation to the train companies, but very little of this money will be passed on to passengers.

Network Rail claimed that it had been unaware of any problem at Liverpool Street until 1am on Wednesday, less than four hours before the lines were due to reopen. The company said that its contractors had failed to keep it up to date with their progress, especially in replacing overhead power lines.

National Express, which operates services into Liverpool Street, said part of the problem was that resources had been diverted to Rugby. An upgrade at Stevenage was also abandoned so that engineers could concentrate on Rugby.

David Franks, rail director of National Express, said: “The contractors appear to have gone where they were going to get the most cash.”

Bechtel was overseeing eight other contractors at Rugby, which was being redesigned to create a new platform and allow express services to bypass the station at 125mph. Bechtel failed to return calls from The Times last night.

Jeremy Candfield, the director-general of the Railway Industry Association, which represents Network Rail’s contractors, said: “It’s premature to say what happened at Rugby, but we do not believe there is a generic problem.”

Mr Coucher, who was belatedly called in last night by Ruth Kelly, the Transport Secretary, to explain what went wrong, has himself summoned Bechtel and other leading contractors to a high-level meeting next week.

Mr Coucher, who has a salary of £466,000 and received a £76,000 bonus last year, confirmed that normal service would resume this morning. He said: “I can take no comfort from this news in the knowledge of the pain and inconvenience we have caused passengers over the past few days.”

Gerry Doherty, the general secretary of the TSSA white-collar rail union, said that the large number of contractors involved at Rugby had been a “recipe for confusion”.Bob Crow, the general secretary of the Rail Maritime and Transport union, said: “It is ludicrous that work planned months ahead should have overrun so seriously because there weren’t enough contract staff to do the work.”

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