Deutsche Bahn is close to securing a concession from Eurotunnel that would allow the German national railway to send its high-speed trains through the Channel tunnel and offer direct services from Germany to London.

The German transport operator wants to develop freight and passenger routes into Britain using High Speed 1, the new fast track from the Channel Tunnel to St Pancras, but present safety regulations permit only Eurostar trains that are configured as two trains joined together with a locomotive at each end. To send its trains through the tunnel, Deutsche Bahn needs to gain consent for trains that do not have the special Eurostar configuration that can split in the middle.

Rail industry sources say that Deutsche Bahn is close to an agreement and is keen to develop direct services using its ICE fleet of high-speed trains to Britain. An industry insider said: “I would not be surprised if by 2012 you looked up at the departure board at St Pancras and saw Cologne and Frankfurt services operated by Deutsche Bahn.”

Deutsche Bahn's ambition will raise the stakes in the emerging struggle for control of the assets of high-speed rail in Britain. The European Commission last week gave the British Government permission to grant £5.2billion of state aid to London & Continental Railways (LCR), the government-controlled company that built High Speed 1 and redeveloped St Pancras station.

The approval of state aid wipes out an equivalent sum in LCR debt and clears the way for an auction of high-speed rail assets. In addition to High Speed 1, LCR owns a third of the Eurostar joint venture (the majority of Eurostar is owned by SNCF, of France, with 5 per cent held by Belgium's state railway) and the European Commission want the ownership of the track separated from the ownership of Eurostar.

Deutsche Bahn has signalled that it might like to buy the British stake in Eurostar, but there are other contenders, notably Air France/KLM. The Franco-Dutch airline sees StPancras and High Speed 1 not as a British railway but as an extended terminal of Charles de Gaulle airport, delivering passengers from a wealthy catchment area to catch Air France intercontinental flights.

SNCF may feel uneasy about sharing Eurostar with its powerful German rival. Speculation is growing that Deutsche Bahn may shift its focus to buying the High Speed1 track business if it gains access to the tunnel for its ICE trains. Meanwhile, a restructured Eurostar, controlled by SNCF, could develop into an unbranded train operator, providing services for airlines and other private sector investors.

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