The possibility of closing down the country's rail network has been raised with the Government by Treasury.

In Budget papers released today Treasury tells the Government more than $200 million a year has been pumped into KiwiRail since 2010 - but the return in earning has only been around a $100 million a year.

The labour government bought KiwiRail back from private ownership for $690 million, just before National took power in 2008.

Treasury is now recommending a comprehensive study to understand the implication of closing the network, while keeping the metropolitan lines in Auckland and Wellington open.