Motorists in the North will be forced to pay to drive on congested roads within a decade - but commuters opting instead for the railways have been warned they could soon be priced off the tracks as well.

An influential report from the Government's key transport adviser yesterday raised the spectre of travellers being priced off vital rail links as well as roads in the region in a bid to tackle growing congestion.

Publishing his long-awaited report, Sir Rod Eddington said road pricing - such as pay-as-you-drive and congestion charging - was by far the best means of getting vehicles off the road in peak hours at the same time as boosting regional economies and dealing with climate change.

However, in a little-noticed note in his 400-page study, he warned that "in a world of widespread road pricing" rail routes linking towns and cities across the North-East would become stretched to the limit.

With many lines already predicting future capacity problems, Sir Rod suggested the pressures would be "lower if rail pricing is used to help manage demand."

It came as the former British Airways boss ruled out a new high-speed North-South rail link, insisting it would be a costly mistake.

Last night, MPs and business leaders hit out at the comments, saying drivers could not be priced off the roads and then priced off the railways.

"This is absolute nonsense," Tyne Bridge MP David Clelland said. "This proves we cannot introduce a road pricing scheme until we get good quality, affordable public transport."

The Eddington report was commissioned by Chancellor Gordon Brown 18 months ago in a bid to investigate the relationship between transport and the economy and to help shape Government policy over the next 30 years.

Congestion, he said, would increase by 30% by 2025 without action, with one in five cars experiencing "stop-start travel" conditions.

Calling for transport policy to be focused on urban areas, Sir Rod - who visited Newcastle and Teesside during his study - said the Government should not back "extensive new networks" but improve what they already had.

Backing road-pricing as the best means of improving the road network, he said there should be a case for smaller-scale road building - where there was a strong business case to do so.

He said it was time for the environmental costs of journeys and transport projects to be included in costs and for the Government to set out clearly its ambitions for Britain's transport network over the next 30 years.

"I am clear that if we don't have road pricing congestion will become an increasing problem because it will simply not be realistic to build roads quickly enough," he told The Journal. "But road pricing does not mean there should be no more road building. Roads are critical to the way the country works."

According to his report, almost 90% of all journeys take place on roads. However, campaigners of the Go For Jobs campaign - run by The Journal, the North-East Chamber of Commerce and our sister paper the Evening Gazette - said it was time the Government paid attention to the needs of the region.

"We have a first-class case for improvement if ever I've seen one," Mr Clelland said.

Business chiefs also backed the call. John Wright, of the North-East Federation of Small Businesses, said an efficient, reliable public transport network was crucial. "The average business loses nearly seven hours a week of staff time because of transport problems. That directly hits the North-East's economy and must be a Government priority for urgent action," he said.

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Fight will continue for a high speed rail link

Campaigners in the North-East were last night still pushing for a high speed rail link to the region despite Sir Rod Eddington's lukewarm response to the idea.

Council bosses in the region have argued for a system which could halve current journey times to London.

Northumberland businessman Alan James has developed a case for a North-South magnetic levitation (Maglev) system.

But Sir Rod's report yesterday said evidence of economic benefits are "very quiet" and cheaper alternatives, such as signalling changes or longer trains, could improve capacity on the East Coast Main Line.

The former British Airways boss said: "With untried and untested technology you have to be very careful. History suggests it's very expensive and may not deliver what you would wish it to deliver.

"In a world in which resources are ultimately constrained, even if the public and private sectors work together, you have to ask what are the best ways to spend money and what are your priorities."

But Alan James, of Wark near Hexham, project leader of UK Ultraspeed, said: "We have serious doubts about the logic here.

"Can it really be the case that putting the brownfields of Teesside as close to Heathrow in time terms as Canary Wharf is today will do nothing to improve the economic competitiveness of the region?"

The Association of North-East Councils, which secured the backing of all 25 authorities it represents for a high speed link, said it would continue to fight for the line.

Chairman Mick Henry said: "We would welcome an examination of how new, very high speed lines, which Sir Rod refers to, could enhance existing capacity and build new capacity.

"A potential new high speed North-South link offers the Government a historic opportunity to address regional economic disparities."

Gateshead East and Washington West MP Sharon Hodgson said: "A Maglev link would considerably improve journey times between the North-East and the rest of the country, and I hope to join forces with other MPs to try and make this happen."

She claimed that Britain needs a "rail revolution", and added: "I'd renationalise the railways tomorrow if it could be done."

GNER spokesman John Gelson welcomed calls for investment in the existing rail network, but said: "We are disappointed at the lack of a clear, direct reference to a high speed link in future transport policy, because we believe that's something the country needs and the North-East would benefit from."

Tom Winsor, the Government's former rail regulator, branded Sir Rod's report a "one-day wonder" and said: "He is wrong to reject the idea of having major transport projects which will deliver really significant benefits to our country."

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Key points of the Eddington report

• Improve what we already have - "to meet the changing needs of the UK economy, the key strategic economic challenge is to improve the performance of the existing network".

• Concentrate transport policy over the next 20 to 30 years on congested and growing urban centres, their catchment areas and key corridors and `international gateways' such as ports and airports.

• Before acting though the Government has to be clear that the benefits - including the economic case and environmental benefits - justify the cost. The Government should prioritise policies and projects "where transport is constraining growth" adding: "Even with better use and (road) pricing, there will remain a strong economic case for targeted infrastructure investment".

• The economic case of transport projects should be considered, Sir Rod said, explaining that in many urban areas road `interventions' produced a return of £3 for every £1 of public investment. Even when environmental costs were taken into account, the returns in relation to the economy were not to be ignored.

• Road-pricing is key to the future of Britain's transport network. "I believe that there is no attractive alternative to road-pricing. Without a widespread scheme by 2015 the UK will require very significantly more transport infrastructure."

• The Government should seriously consider backing plans to expand ports and airports in a bid to ease pressure on other parts of the network.He says there will remain a "strong economic case for additional runway capacity" raising the possibility of more night-time flights, particularly for freight. On ports, however, Sir Rod supports evidence that calls for expansion of those in the South-East at the expense of the North.

• A fatal blow was delivered to a new high-speed North-South rail link, with the Eddington report saying there was a risk of policy becoming the "pursuit of icons". Maglev technology in particular was "untried and untested" which history had shown to be expensive. A high-speed line in the UK, he said, would not "significantly change the level of economic connectivity" between the regions.

• In a shock move, the report called on ministers to introduce legislation to allow local areas such as Tyne and Wear to introduce London-style bus franchising in a bid to ease congestion, and allow bus services to "become a substantial contributor to the success of urban areas".

• There was not a one-size-fits-all-approach, he stressed, and he advised against the "build it and they will come attitude". But Sir Rod did urge ministers to develop strategic policies dealing with transport over the next 30 years, over a 10-20 year period and over a five to 10 year period "setting out details of committed schemes and timings of decisions".

• He stressed the importance of improving the planning system so ministers were put at the heart of the process with a "clear statement of strategic objectives", and tight deadlines for dealing with major projects, including at inquiries.

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South to get first bite at expansion

Transport ministers have been told to back expansion of ports and airports - but to focus on the needs of the South first.

Sir Rod Eddington yesterday insisted international `gateways' such as Newcastle Airport and Teesport had to be a priority for transport planning in the future.

But, on ports, he backed a controversial report which suggests that only the South-East should meet demand for deep-sea ports over the next 20 years.

Calling on the Government to support expansion by removing "barriers" in the planning system, Sir Rod backed the view that shipping companies would look to mainland Europe if additional capacity was not built in the South-East - even though it could be cheaper to divert to the North.

Backing airport expansion, he said where "capacity constraints are likely to bite" ministers should support expansion. Even when environmental considerations are taken into account, "there will remain a strong economic case for additional runway capacity" - although he conceded this would be focused primarily in the South-East.

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Western bypass delays continue

Predictions of the impact road pricing will have on congestion show no significant decrease in delays on the A1 western bypass.

Sir Rod Eddington's report yesterday contained maps forecasting the most congested roads in the UK in 2025, and show the effect of a pay-as-you-drive system.

While a road pricing system would take several North-East roads out of the top bracket for delays, the western bypass would remain among the congestion hotspots.

The Government has indicated that cash for an upgrade to the A1 hinges on the introduction of road pricing. But the North-East Chamber of Commerce last night said the Eddington research shows improvements to the road are needed regardless.

Road charging may stop the problem from spreading to other parts of the region's network, but will not ease problems on the key `pinch point' of the bypass, NECC said.

Policy and representation manager Rachel Spence said: "What it means is effectively what you're doing is planning for a standstill position in 2025. People are asking which should come first, charging or a road upgrade. The answer is both at the same time."

Richard Hibbert, spokesman for the People in Motion research project into congestion in Tyne and Wear, said: "Any decisions on the nature and timing of road user charging within Tyne and Wear will be based on the best interests of the area."

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New powers would drive up passenger numbers

Bus services in Tyne and Wear should be franchised in order to drive up passenger numbers and ease congestion on the roads, Sir Rod Eddington recommended yesterday.

In a move that has shocked the industry, the former British Airways chief called on the Government to give passenger transport executives, like Nexus in Tyne and Wear, the power to set tough targets and standards for bus companies - and to have the power to penalise firms when they fail to deliver.

MPs and transport chiefs have repeatedly urged ministers to back an expansion of London-style powers in urban areas outside the capital, to little effect.

However with the backing of the Eddington report, the Government will be under mounting pressure to end bus deregulation - something politicians warned was the only way of reversing declining passenger numbers in the North.

"There is a strong case for this, and it's exactly what I would want to see for Tyneside," said Newcastle East and Wallsend MP Nick Brown.

"We need transport bodies that have real powers to make a success of this. The London model shows a way forward for the rest of us."

He was backed by Coun David Wood, chairman of Tyne and Wear passenger transport authority, who said 20 years of deregulation had not worked.