The transport secretary has outlined plans to scrap the Strategic Rail Authority and devolve more power over the railways to the regions.

In a major policy U-turn, Alistair Darling announced that the body created by deputy prime minister John Prescott three years ago will have its powers split between Network Rail and the government.

Setting out the details of a white paper, the Cabinet minister said that SRA chief Richard Bowker would stand down in September, with the agency likely to be closed in the second half of next year.

Bowker said his staff had ensured that "Britain's railway is now rehabilitated and ready for real delivery to passengers and investors alike".

Darling told MPs that the review would put the railways on a "stable long term footing and tackle the remaining flaws left over from privatisation".

"These proposals will make sure that Britain's railways are run in the public interest, for the benefit of its passengers and freight customers."

Under the plans, the government is to take charge of national strategy for the railways.

The Department for Transport will set performance levels and award train franchises.

Rail regulator Tom Winsor will continue to manage the economic issues and will be tasked with ensuring a fair deal for taxpayers.

Darling said the reforms were necessary because at the moment "no one organisation runs the railways on a day to day basis".

"Too often under the present system companies have been able to pass the buck for poor performance," he added.

Network Rail will take on more responsibilities, such as setting timetables.

And train operators will be "able to concentrate on improving services".

But the minister warned that the government would sack companies if they "repeatedly fail to deliver".

On safety, Darling said that "much as been achieved" but oversight powers will now be transferred to the Office of Rail Regulation.

Devolved powers

Darling also announced that more powers over the railways would be devolved to Scotland, Wales, London and the English regions.

He said that "many decisions on the railways should be taken at a local level".

"Local transport decisions are best taken by people who know what is needed locally," he added.

More powers are to be given to the Scottish executive, with funding transferred from Whitehall to pay for its new responsibilities.

"The Scottish executive will decide what they want and how to pay for it," Darling promised.

Responding to that move, SNP transport spokesman Pete Wishart said it was a "common sense decision".

"This measure will allow the Scottish executive to pursue its rail priorities more effectively. I hope that the executive will now make the most of this opportunity," he added.

In Wales, the Cardiff assembly will also be given further powers including responsibility for funding some services.

But Plaid Cymru parliamentary spokesman said the timing of the announcement was "strange to say the least".

"Next week, parliament is due to discuss the draft Transport (Wales) Bill, a large section of which devolves power over the SRA to the Welsh Assembly Government," he said.

"Why did the UK government bother drafting this bill and assign precious parliamentary time for it to receive pre-legislative scrutiny if large sections of it are now redundant?"

And mayor Ken Livingstone will see his responsibilities extended within the Greater London Authority area.

Livingstone said he welcomed the announcement of extra powers for Transport for London.

"Devolution has already delivered less congestion and better buses for the capital and this is a real opportunity to deliver improved services for rail passengers," he said.

"Under my plans, and with the government's support, London would have a truly integrated transport network run with the single aim of putting passengers first."

Powers over trains outside the GLA area could also be given to the mayor, although this will be subject to further consultation.