The West Coast Main Line, which links Birmingham to London, is becoming so popular it could reach its capacity within nine years despite an #8.3 billion modernisation programme, it has emerged.
And Birmingham business leaders warned massive further investment was needed to prevent the region's transport system grinding to a halt.
The rapidly-approaching deadline was revealed by the National Audit Office, the official government auditor, which published the results of an inquiry into the upgrade.
Services using the 640-mile West Coast Main Line run from London Euston to Edinburgh and Glasgow, passing through Birmingham New Street, Wolverhampton and Coventry.
The modernisation scheme, which was originally expected to cost #2.5 billion, has allowed trains to run at 125 mph and will cut journey times between London and Birmingham by 20 minutes once all the work is completed.
But the improvements have led to an increase in demand on services such as Virgin Trains' long distance which the network is unable to sustain, the NAO warned.
The report stated: "In 2005-06, passenger journeys on Virgin West Coast grew by over 20 per cent, which was ahead of forecast, and in 2006 some parts of the route were operating at or near capacity.
"The remaining work on the programme, to 2009, will increase passenger train and freight capacity, but the consensus in the rail industry is that by around 2015 to 2020 the line will have insufficient capacity to sustain current levels of growth in passenger and freight traffic, should these growth levels continue."
Jerry Blackett, Chief Executive of Birmingham Chamber of Commerce, urged the Government to heed the warning.
He said: "Rail is booming, both for freight and passengers, but we haven't got enough money to build more of it."
Ministers were examining options to introduce road pricing, which would add to demand for rail services even more, he said.
"We are looking at using pricing to get people out of their cars and on to trains.
"The irony is that rail companies have also used pricing to try to reduce overcrowding on the trains by raising ticket prices."
MP Gisela Stuart (Lab Edgbaston), who is co-ordinating a campaign to win Government funding to rebuild Birmingham New Street station, said: "This demonstrates the huge growth in demand for services using New Street.
"The plans to refurbish the station are the bare minimum that are needed."
Gary Clarke, Chairman of Centro-PTA regional transport watchdog, said: "The West Midlands has higher passenger growth than London and the south east. We are the hub of the national rail network.
"We need to see some serious long-term planning to cope with the increased demand."