Beleaguered Railtrack may take the administrators appointed to run the company to court.

Company lawyers have discussed the prospect of taking Ernst & Young, and a bank, to court over £350 million of frozen money.

The cash was frozen after the Government appointed the City accountants to begin moves to set up a new company to replace Railtrack following the firm's spectacular collapse.

It is understood Railtrack wants to use the money to pay shareholders.

The proposed action was announced on the same day that it emerged that well-respected chief executive Steve Marshall is to quit the rail business.

The news of the departure of Mr Marshall, who described the Government's treatment of his company as "shoddy and unacceptable", was greeted with disappointed by York workers.

"It is sad to see yet another good railwayman having to fall on his sword to save the company face," said an employee who asked not to be named.

"It seems people with experience of the industry are of no use and it is no wonder the company is in so much trouble.

"We don't know what the future holds now."

Mr Marshall's departure came as pressure mounted for the Government to ensure no Railtrack executive was given a huge pay-off, although city analysts claim directors would be "too embarrassed" to take large sums.

Meanwhile, a major York rail construction company has pledged it is "business as usual" despite Railtrack's demise.

Contractor Jarvis, which has a maintenance deal with Railtrack, has told staff at its Toft Green centre that work schedules will be unaffected by the appointment of administrators.

But issuing a statement to the London Stock Exchange, Jarvis chiefs revealed the Government had assured them that the company would continue to play a key role in the rail business.

The statement said: "We have already received assurance from the relevant Government department, over the weekend, that the work schedules in which the company is engaged will be unaffected by the appointment of administrators.

"We also welcome the Government's commitment to spend £30 billion to improve the network."

Mike Toft, of Jarvis' London office, added: "We, and our workers, are pleased to have been reassured by the Government.

"We have got long contracts and we understand that they will continue under the administrators."

Updated: 11:34 Tuesday, October 09, 2001