China said on Wednesday that 54 people would be punished for design flaws and poor management it blamed for a fatal July crash on the nation's flagship high-speed rail network that sparked public fury.

The highly critical statement from the State Council, or cabinet, said the railway ministry had mishandled the rescue and failed to address public concern after the disaster, which killed at least 40 people and wounded nearly 200.

The cabinet repeated earlier government findings that a July 23 lightning strike stalled one high-speed train near the eastern city of Wenzhou and caused signalling equipment to fail, allowing a second train to rear-end the first.

"The Ministry of Railways did not properly handle rescue efforts, did not issue information quickly, and failed to address public concerns in the proper fashion," the cabinet statement said.

"The China Railway Signal and Communication Corp, the main signalling equipment contractor, did not fulfil its full responsibility, which resulted in serious design flaws and security risks in the equipment it supplied.

"The relevant workers in the Shanghai Railway Department had little training in safety awareness, and after the accident happened, they did not carry out their duties properly or correctly."

The crash triggered a flood of criticism of the government and led authorities to freeze the rapid expansion of China's ambitious high-speed rail network, already the world's most extensive and held up by Beijing as a sign of rapid progress.

The crash, China's worst rail accident since 2008, also sparked accusations that the government had compromised safety in its rush to develop and raised questions over the consequences of corruption.

Users of the country's hugely popular microblogs demanded to know why the system failed to inform the driver of one train that the train in front had halted, and also questioned whether the death toll might be higher than authorities admitted.

Even China's official media weighed in, with the People's Daily newspaper - the Communist Party's mouthpiece - saying the country did not need 'blood-soaked GDP'.

The cabinet statement made no mention of the deaths or injuries in the accident or compensation for the victims but said the ministry of railways would be further investigating its officials.

China Central Television devoted several minutes to the cabinet findings, showing footage of Premier Wen Jiabao addressing the State Council, intercut with animated graphics of lightning striking the rail tracks.

The cabinet said the former railway minister Liu Zhijun and Zhang Shuguang, a former deputy chief engineer at the railway ministry, would be among those punished for the accident.

Liu was sacked in February over corruption charges, after he allegedly took more than 800 million yuan ($125 million) in kickbacks over several years on contracts linked to the high-speed network.

Zhang, who was closely tied to Liu and involved in the high-speed rail's design, was suspended in March.

The cabinet recommended that all 54 railway officials singled out for punishment should be disciplined with demotions and the loss of their positions within the nation's ruling Communist Party.

The cabinet did not say what criminal charges, if any, would be pressed.

Those singled out for punishment were from the China Railway Signal and Communication Corp, the Design Institute of Signals and Communication, the railway ministry and the Shanghai Railway Department, the statement said.

Another man named as responsible was Ma Cheng, the deceased former CEO of the Signals & Communications Group.

Many online reactions to the cabinet statement were critical, with some expressing doubt whether the punishments would have much effect.

"The train accident results are incredible," wrote one microblogger on the Tencent online service.

"A bunch of 'disciplinary actions', 'demerits' and 'removal from Party posts...' Is there any point of substance?"

China's high-speed rail system only opened to passengers in 2007, but grew at breakneck speed thanks to huge state funding and is already the largest in the world, with 8,358 kilometres (5,193 miles) of track at the end of last year.

In December 2010, the railways ministry announced that a Chinese high-speed train had reached a speed of 486 kilometres per hour, smashing the world record for an unmodified train.

But earlier this year, cracks started to emerge.

China's state auditor in March said construction companies and individuals last year siphoned off 187 million yuan in funds meant for a flagship new Beijing-Shanghai link that launched just before the crash.

Authorities decided to limit speeds on the high-speed network to 300 kph following the allegations of widespread, high-level graft in the rail sector, with fears that safety had been compromised.