The boss of Network Rail has said he will forego this year's bonus after a row erupted over whether the Government could veto any payout.
In a statement, chief executive Sir David Higgins said the money he would have received will go towards improving safety.
The company said they were not due to decide bonuses this week, despite strong speculation this issue would be the subject of a meeting on Friday.
Sir David said "even if" he was to be given a performance-related payout, "I and my directors decided last week that we would forego any entitlement and instead allocate the money to the safety improvement fund for level crossings".
"I can confirm that remains our intention."
The debate comes after the organisation admitted breaches of health and safety regulations over the deaths of teenagers Olivia Bazlinton and Charlotte Thompson at a level crossing in 2005.
His remarks follow Labour's call for ministers to block any extra payments to executives at the subsidised rail network.
Transport Secretary Justine Greening had planned to take the unprecedented step of attending the company's annual meeting on Friday.
She (SNP: ^SHEY - news) intended to vote against rumoured plans to hand chief executive Sir David a bonus worth £340,000 but warned her decision would not be binding.
Bosses at Network Rail have said this meeting will be adjourned so they can "reflect further" on incentives and payments.
Speaking on Jeff Randall Live, the chairman of the Association of British Insurers Investment Committee said: "I think we have a problem at the moment of actually defining what we actually want companies to achieve."
Peter Talbot when on to say: "I think the key should be sustainable business success and I don't think we've necessarily got the perfect metrics at the moment to be able to measure that."
Ms Greening described Sir David's decision as "sensible and welcome".
"I have made it clear to Network Rail at every stage that this proposed package did not go far enough in reflecting the need for restraint," the Conservative minister said.
"It was also the wrong time to look at this issue given I will be shortly unveiling a rail review that will strengthen the corporate governance of Network Rail and see a special director appointed to the board to represent the views of taxpayers.
"The fact that its executive directors have also chosen to forfeit their annual bonuses to charity is a sign that they have recognised the strength of public opinion."
It is not yet clear if the money will go to charity, as Ms Greening suggested, or Network Rail's own safety fund.
Labour claimed they had discovered a clause in the Government's contract with the subsidised rail company requiring written permission from ministers before cash can be doled out.
Shadow transport secretary Maria Eagle said Network Rail would have to seek written permission from the Transport Secretary before any deal was made, and also that she would have the right to sit on the remuneration committee.
Senior (Xetra: 852271 - news) management at the publicly-funded company have done the right thing, she said after details of Sir David's intentions were published.
"At a time when so many families and rail commuters are being squeezed financially, when fares are rising by up to 13% and the rail network is performing inadequately, it was completely wrong for bonuses of this scale to have been even considered, let alone agreed," she added.
"Yet again the Government has shown how completely out of touch it is with the public's desire to see greater fairness in executive pay and an end to the automatic bonus culture."
Ms Eagle accused her Conservative counterpart of "refusing to stand up for the British people" by using her apparent veto.
Labour's claim that the Government could override the company's remuneration decisions was challenged by departmental sources, the Times reported.
Network Rail was set up by the then-Labour government in 2002 as a replacement for Railtrack. The company, which runs and operates most of the rail network, says no decision has been taken on bonuses.
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