Sir Richard Branson has warned that his rail services out of Euston to Birmingham, Manchester and beyond are on the verge of meltdown because of ongoing engineering crises.

Reacting to increasing criticism from passengers and business chiefs, who recently compared Virgin's rail services to failures at the opening of Heathrow's Terminal 5, Branson today admitted things were bad and could get much worse.

The West Coast Main Line out of Euston is the subject of Network Rail's multi-billion-pound upgrade. The eight-year project has been plagued by failures in recent weeks on top of weekend closures to facilitate track work. The upgrade aims to provide high-speed services running at more regular frequencies from the end of the year.

One rail executive told the Evening Standard that failings on the line by Network Rail, which is responsible for track maintenance and signalling, could eclipse recent foul-ups of overrunning works that stranded passengers after holiday periods. "If you thought the late-running engineering after Christmas was bad you may not have seen anything yet," he said.

In a letter to the Financial Times today Branson wrote: "After two years of improved track performance we have seen a sharp dip in the reliability of the track this year. Indeed, since Network Rail's New Year overrun the number of weekend and weekday closures has increased dramatically.

"If they are having this level of problems before they increase the frequencies in December, our concern is that it could be even worse when the new, more frequent timetable comes into effect."

The fears are that Network Rail, in attempting to hit its upgrade deadline, is ignoring day-to-day maintenance issues and that any overrun on weekend closures will mean the overall project will not finish on time.

Branson said that although he had raised "serious concerns" with Network Rail, the Office of Rail Regulation and the Government, he feared no one was listening.

"We fear a continued decline if these issues are not addressed soon," he added.

"The recent signalling incidents around Milton Keynes which have delayed nearly a quarter of a million of our customers have made me and my Virgin Trains team increasingly worried about the ability of Network Rail to meet its timetable and deliver an upgraded railway that is reliable and can be maintained.

"We question why we and our passengers remain bound by this unrealistic timescale. We would urge a considered approach and a more realistic timeframe to avoid further pain to our passengers."

Branson's move came after criticisms from business leaders represented by the British Chambers of Commerce, which has complained of "endless problems" and "heavy delays and cancellations" and likened the Virgin rail service to the crisis seen at the opening of T5.