Ppps - Public-Private Partnerships - will certainly have been on the agenda of Friday's informal Cabinet meeting at Chequers to take stock of the government's present standing and future plans. When these Partnerships work well they provide an excellent way of harnessing private finance and expertise to public needs. However, they depend on trust between the partners and, regrettably, this trust has broken down as the result of the government's handling of one of the most prominent and financially substantial of the partnerships so far undertaken - Railtrack plc. Although Stephen Byers has mounted a robust defence of his decision to put Railtrack in administration (and has been strongly supported by the Cabinet and Labour backbench MPs) his action has left the private shareholders of the company with a deep sense of injustice - not to mention their financial loss.

Several of the City of London's top fund managers have now addressed a letter to the Chancellor of the Exchequuer drawing his attention to the negative effect that the Railtrack decision is likely to have on future PPP proposals among them the London Underground, the Cross Rail project through Central London and the upgrade of the East Coast Main Line. The letter does not mince words. It includes this warning to the Chancellor: “The Government's actions have caused considerable damage to the relationship between the Government and the whole of the business sector, in particular the City...We believe it is important for Government to realise that the issues raised by the Railtrack administration, including its handling, have far–reaching consequences.” The interesting question is whether the decision complained of by the City was taken the Chancellor himself or by Mr Byers.