Fiery union leader Bob Crow has accused the government of taking the country back 50 years, after the Department of Transport admitted new rail franchises could be permitted to introduce third class rail tickets.
But there is confusion over whether the suggested "third class of ticket" would mean cheaper, or more expensive tickets for passengers.
The DfT has said that any new class on trains would not be "reducing standards" but could involve a middle-tier class, between First and Standard, costing passengers more, not less, akin to "Premium Economy" flight fares.
Labour's Lord Myners, the City Minister in Gordon Brown's government, submitted a written question in the House of Lords to ask whether "new rail franchises permit the introduction of a third passenger class?"
Earl Attlee, who responds to transport questions on behalf of the government said it was permissible, and that "the current franchising system allows bidders to propose the introduction of a third passenger class as long as these proposals comply with the ticketing and settlement agreement and franchise agreement."
Lord Myners told The Huffington Post UK: "It's an answer that will shock a lot of people."
The DfT insisted it would not be looking at lowering standards or introducing standing room only for cheaper fares but, in fact, a third class of ticket could only be introduced as a higher-priced ticket.
A spokesman told The Huffington Post UK that Lord Attlee "spoke of the possibility of 'a third passenger class' like premium economy on flights or business leisure class on Eurostar, not reducing current standards.
"The RMT is deliberately confusing the two to scare train passengers.
"It is completely untrue and deliberately misleading to claim that this government wants to introduce 'third class' fares.
"It absolutely does not: the minimum level of service is standard class and the government is only interested in proposals from train operators that would improve, at the very least maintain, existing standards."
A spokesman for the RMT told The Huffington Post UK that the DfT's response was "pure Thick-Of-It spin, we know what was actually said in parliament, and we know what third class means."
Earlier, RMT General Secretary Bob Crow said in a statement: "We knew that this government was winding the clock back on employment, benefit and legal rights but now they are opening up the option to dive back in time more than 50 years to the days of third class rail travel.
“On some overcrowded and de-staffed services, passengers could be forgiven for thinking they are already travelling third class as the train operators bleed them dry.
"While the Chancellor blags his way into first class without a ticket his Government are giving a green light to bring third class travel back in through the back door for the masses. What a shocking indictment of this rotten bunch running the country.”
Anthony Smith, chief executive of rail passenger rights watchdog Passenger Focus told The Huffington Post UK:
“Getting a seat can be a struggle for some passengers as overcrowding on the railways continues to be a big problem – nationally less than three in four passengers (69 per cent) tell us that they are satisfied with the availability of seats or space to stand.
“Creating another class of travel could add another layer of complexity to the system and there is a risk that some passengers could feel squeezed out of a seat.
"We need substantial long-term investment as soon as possible to provide longer and more frequent trains to help reduce crowding.”
The possibility of standing-room only carriages have long been discussed in order to give passengers a cheaper deal, as rail fares continue to climb dramatically.
Liberal Democrat Tim Leunig, chief economist at the liberal thinktank CentreForum, wrote in the Guardian on the summer that lower fares were desperately needed, and standing room only should be considered.
"What's the solution? We need lower fares," he wrote.
"Call it third class if you like. Of course people prefer to sit down – but the reality is that most people are willing to stand."
First Group, who were to take over the West coast mainline franchise from Virgin Trains, discussed the possibility of introducing Premium Economy seats - to use up empty First Class seats, according to the Guardian.