Passenger groups and business leaders yesterday said they would not oppose a not-for-profit organisation taking control of train operations after The Herald revealed top level informal talks have already taken place.

The paper reported how privatisation on Scotland's railways could end within four years with one firm running tracks, stations and trains.

Executives at Network Rail, the quasi-public concern that already runs rail infrastructure, are understood to have discussed operating passenger services as well.

Reacting to the idea, John McCormick, chairman of the Scottish Association for Public Transport, said: "I don't think we would have much objection to Network Rail operating trains. However, we would like to ensure it was still bid for on a competitive basis with other commercial organisations. That maintains the need to improve services and keep costs down.

"Network Rail would have to become more passenger-centred if this was to happen. First ScotRail have done a good job and services are better now than a few years ago."

Network Rail has said there are no "concrete proposals or discussions at this stage" and have made no approach to the Scottish Executive.

Jack McConnell was at pains yesterday to deny Labour had plans to re-nationalise the rail network despite a pledge to "examine" running the franchise on not-for-profit basis being included in the party's manifesto. The First Minister said: "There have been no secret talks and no plans to renationalise the railways in Scotland."

Business leaders said any change must lead to improved quality for passengers.

Graham Birse, deputy chief executive of Edinburgh Chamber of Commerce, said: "Any options for change that could lead to greater capacity, punctuality, speed and efficiency are worth looking at."

"First ScotRail have made great strides in recent years but there are problems with the infrastructure. A speedy connection between Glasgow and Edinburgh would make a difference to the economies of both cities."

David Ross, director of Glasgow Chamber of Commerce, said: "The current operator has provided greater efficiency, improved customer service and choice and ticketing options.

"We remain to be convinced about taking ownership back into the public sector and that the impact to consumers and businesses should be carefully considered."