Transport campaigners hailed the “beginning of the end” for rail franchising yesterday after winning major concessions at Labour’s national policy forum.

The party refused to pledge to fully renationalise train operators — instead offering a “level playing field” where the state will bid against private companies for franchises.

But rail unions Aslef and TSSA and grass-roots activists won major concessions in talks in Milton Keynes.

After refusing repeated drafts of the policy, forum members settled after shadow ministers agreed to state that “we need to end the presumption against the public sector” in official documents.

Further manifesto pledges include stripping franchises of fare-setting powers and a review of the “failed franchising process.”

Labour also pledged to set up a new rail authority to take control of rolling stock — currently owned by City banks and investment giants.

In a speech on Saturday, party leader Ed Miliband said rail privatisation had “put the profits into the private sector and put the risk onto government.

“We know East Coast has worked in public hands. So on the basis of value for money, let’s extend that idea and let the public sector challenge to take on lines.”

As he spoke his advisors were still desperately trying to reach a deal with party activists demanding a tougher line.

TSSA general secretary Manuel Cortes said that the new policy could help Mr Miliband win next year’s election.

“Labour’s plan will see new public bodies created to put our railways back together and a public train operator will come into being.

“In our view, any objective review of franchising will lead to the public train operator taking on lines as franchises expire.

“Make no mistake, franchising has been given its last rites.

“This radical overhaul of our railways should mark the beginning of the end of the Tories’ failed experiment of rail privatisation.

“TSSA will continue campaigning hard for public ownership until the entire industry is back to where it belongs.

“Some of the privateers have already threatened to hand the keys back as a result of this new policy — good riddance!”

But the RMT union, which is not affiliated to the Labour Party, called on Mr Miliband to derail privateers for good.

Acting general secretary Mick Cash said: “We’re crystal clear — we need full, immediate nationalisation. Anything short of this is a cop-out.

“Why do we need a review of franchising when we know it’s a broken system?

“The evidence is staring us in the face — high subsidies, high fares, high profits and low performance.

“It’s just stupid to maintain any element of franchising and fragmentation.”

Britain’s East Coast mainline was renationalised by the previous Labour government in 2009 after rip-off privateer National Express gave up, saying it could not afford franchise premiums.

Britain’s railways have been in private hands since the 1990s.

Campaigners and unions have recently stepped up calls for public ownership, which remains overwhelmingly popular.