Railway signalling systems are based on fault-tolerant and fail-safe techniques to provide high reliability and safety. Transputers offer multiple communication links and provide a high degree of parallelism and are being used in safety-critical and fault-tolerant applications. We propose a fault-tolerant and fail-safe node using transputers for a local area network with dual ring topology to be used in distributed railway signalling systems. The proposed scheme uses a new technique of leadership based on rotation amongst the transputers of the node. Aspects of safe shutdown, recovery, reconfiguration and clock synchronization of the fault-tolerant and fail-safe node are addressed. Formal specifications of the fail-safe node and the simulation of the proposed technique are also given.