THERE IS SOMETHING JOHN Majorish about our nostalgia for the golden days of the old railway companies: the cream-and-chocolate livery of the Great Western (“God’s Wonderful Railway”), steam’s 1938 record as Mallard raced up the LNER at 126mph, Austin’s triumphal Doric arch beyond which lay the LMS night sleeper to Glasgow and the Glens, and the sleepy Sussex villages served by the efficient electric network of the Southern Railway.

We think we remember the porters, the dining cars and the distinctive engines of the Big Four, before they were nationalised in 1948 and became part of a service we loved to hate – BR’s dirty engines, curly sandwiches, fictional timetables and surly service.

But memory plays tricks. By the end of the Second World War, Britain’s railways were clapped out, as Christian Wolmar makes clear in Fire and Steam, a lively new history of the world’s oldest railway system. For six years they had performed heroically – evacuating 1.3 million people to the countryside on 3,800 special trains in only two weeks, running 500 military troop and weapons trains a day in the build-up to D-Day, keeping a system going through Blitz and blackout, shortages and overcrowding. But starved of investment, with worn-out track and barely able to pay a dividend, the private railways, 115 years after the Liverpool & Manchester opened for service, were exhausted.

Even before the war, they were struggling. Amalgamating the higgledy-piggledy structure of 178 independent companies in 1923 had left local jealousies, ancient rivalries and considerable duplication of track. The new companies were still hampered by myriad parliamentary regulations, failed to see the coming of the motor car (and, more threateningly, the road haulier) and were complacent about investment.

Only the Southern saw that electric trains were the future (though the third rail system lumbered all southern England with the wrong sort of power).

Of course the Big Four could boast some dynamic directors and superb engine designers: enthusiasts still drool over the pioneering locos of Bulleid, Gresley and Stanier. Perhaps it was their mesmerising dominance that wrongly persuaded British Railways to stick with steam until the 1960s, when an earlier shift to diesel or electricity might have saved many of the branch lines that fell to the Beeching axe.

Odd, therefore, that Mr Major wanted to bring back the Big Four just when BR had finally turned a corner, got over the flawed Modernisation plan and the brutal Beeching regime and was running one of the most efficient state railways in Europe.

What is not surprising is the anger that the muddle and cost of the botched privatisation has since caused. Britain loves its railways. They are embedded in our political and industrial psyche. And however many times we have heard the story, however obscure the branch line or specialist the anorak interest, there is always room to hear the facts again. This is the value of Fire and Steam. Little is new – how can it be? It draws on hundreds of published accounts, and acknowledges most of them. And it tells a rollicking tale, with all the facts that Mr Gradgrind might want.

“In 1850, in just one August holiday week, over 200,000 people left Manchester by excursion train,” Wolmer notes. That single statistic is as startling as it is revealing of the railways’ early impact. Railways, arguably, changed the face of Britain (and the world) more than any other industrial invention. Any history has to dwell on the genius of Stephenson and Brunel, the Rainhill trials, railway mania and the infamous George Hudson, the navvies, the battle of the gauges, Tay Bridge disaster, parliamentary trains and cutthroat competition among the rival companies. Wolmar, like others before him, does justice to them all.

More interesting, to my mind, is the past century – from the Edwardian heyday until the Channel Tunnel. This was the long slow decline from the zenith. We are still unsure where the tracks will lead.

FIRE AND STEAM: A New History of the Railways in Britain by Christian Wolmar

Atlantic Books, £19.99; 384pp

Buy the book for £17.99 (free p&p)

Times Recommends

• Superfreakonomics by Steven D Levitt and Stephen J Dubner
• The Times picks the 50 best paperbacks of 2009
• Vincent van Gogh’s letters show the soul of the artist