British rail operator Railtrack is to sue the British government over the decision to place it in administration.
The announcement came as Railtrack announced a pre-tax profit of £292 million sterling for the six months to September 2001.
Although Railtrack plc is in administration, its parent company Railtrack Group is not.
Railtrack Group finance director Mr David Harding said: "We are pursuing legal action against the Government. We are taking the first steps in preparing legal action. We expect to put the Secretary of State [for Transport Mr Stephen Byers] on notice of our intentions soon".
It was Mr Byers who moved to put Railtrack into administration in October. He said at the time, and has continued to maintain, that the company was in "financial meltdown" and that Railtrack had told him in July that its financial position had worsened since May.
But Railtrack says its latest financial figures support its argument that it was not insolvent. Railtrack Group chief executive Mr Steve Marshall said: "Railtrack was trading profitably, in line with expectations.
"As we have said consistently, Railtrack was not insolvent until the secretary of state chose to make it so. No financial meltdown was in sight".
PA