The prospect of higher fares sparked an angry reaction and led to increasing calls for the railway industry to be renationalised.

Rail unions stepped up their calls for the railway industry to be bought back into public ownership, with Rail, Maritime and Transport (RMT) union leader Mick Cash calling it a "kick in the teeth" for passengers.

He said: "The huge hike in fares confirmed today is another kick in the teeth for passengers who already fork out colossal sums to travel on rammed out, unreliable trains while the private operators are laughing all the way to the bank.

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"With over three quarters of Britain's railways now in the hands of foreign states these huge sums of money aren't being invested in essential upgrades and modernisation here, they are being siphoned off to subsidise transport services over the Channel.

"It's no wonder we are a global laughing stock.

"The only solution to the Great British Private Rail Rip-Off is public ownership and an end to this Government sponsored racketeering."

Research by the RMT and the TUC has shown rail fares have been increasing at twice the rate of pay rises in recent years.

David Sidebottom, director of Transport Focus, the independent transport user watchdog, said: "Yet again, passengers, now majority funders of the railway, face fare rises next January.

"Commuters do not give value for money on their railways a high satisfaction score - just one third according to our latest survey.

"So while performance remains patchy and with pay and wages not keeping pace with inflation, they will feel rightly aggrieved if they are paying much higher rises next January.

"Why is the Government not using its preferred measure of inflation: the one that is used to determine wages and pension increases, and one which is often lower than RPI? Why not use the Consumer Prices Index for rail fares too? Passengers deserve a fairer deal."

Andy McDonald, Shadow Secretary of State Transport, said: "The Tories' failure on our railways means passengers have faced truly staggering fare rises, some of over £2,500, since 2010 with fares having increased twice as much as wages.

"Commuters have repeatedly been told that higher fares are necessary to fund investment, but promised investment has been cancelled and essential works have been delayed for years.

"Decisions taken by government ministers are making rail travel unaffordable for the many in favour of huge profits for the few.

"By pegging regulated fares rises to the Retail Price Index, the Conservatives are leaving commuters facing year on year price hikes.

"The truth is that our fragmented, privatised railway drives up costs and leaves passengers paying more for less.

"The railways need serious reform that could be achieved if the Tories matched Labour's manifesto policy to extend public ownership to passenger services, but instead Ministers are persisting with a failed model of privatisation that is punishing passengers."

Paul Plummer, chief executive of the Rail Delivery Group, which brings together train companies and Network Rail, added: "Money from fares pays to run and improve the railway, making journeys better, boosting the economy, creating skilled jobs and supporting communities across Britain, and politicians set increases to season tickets.

"It's also the case that many major rail industry costs rise directly in line with RPI.

"Rail companies are working together to improve performance now, adding thousands more seats over the next 18 months and, longer term, simplifying fares and ticket buying so that the country has the railway it needs to prosper."