Graeme Mersh was left handcuffed and guarded by a police dog on the platform at York station, in full view of fellow commuters, while officers carried out investigations.
The 23-year-old dad, from High Barnes, Sunderland, had been frogmarched off the train after being falsely accused of threatening another passenger with a knife.
"I was really scared," he said. "I didn't know what to think.
"They put a dog in front of me so I couldn't move. I must have looked like a criminal standing there."
Mr Mersh, a contracts manager for the family's window and door making firm, Washington-based Solex Manufacturing, had been travelling from Stevenage to Durham station, where he had parked his car.
The incident happened as the National Express London King's Cross to Newcastle train reached York.
Mr Mersh said another passenger was originally identified as possibly being the alleged knifeman before he was, but they were quickly dealt with on board and ruled out with little fuss.
He added: "The guy who pointed them out then pointed me out through the window.
"A policeman got on, took his truncheon out and told me to put my hands on the back of the seat so he could handcuff us."

Mr Mersh was stunned when he saw armed officers waiting for him on the platform.

"They said I had been accused of having a knife and threatening to slash someone's face.

"I told them I had been asleep for most of the journey, and tried to reassure them that it wasn't me.

"I've got a six-week-old child – I wouldn't be running up and down a train with a knife.

"After about 40 minutes they told me I had been wrongly arrested."

Mr Mersh, a former Echo business awards Employee of the Year, added: "I think they over-reacted with the armed response team.

"They could have just searched me and gone through my bag on the train."
His train having been long gone and not wanting to tempt fate and catch another, Mr Mersh rang his sister, who lives in York, to get him home.

Mr Mersh, whose partner Louise Colquhoun cried when he told her about his ordeal, has not been on a train since and now sticks to using his car instead.

Police explained their actions to Mr Mersh but did not formally apologise.

A spokesman for North Yorkshire Police said: "We can confirm that we were called to assist British Transport Police at York railway station at approximately 2pm on August 20, following reports of a man with a knife threatening another passenger on a northbound train.

"A man was arrested at the scene. Following an initial investigation the circumstances were not as initially reported and the man was released at 2.20pm."

The Mersh family was also displeased with National Express, and said the operator was at first unaware of the incident when they rang to question how it had been handled.

National Express spokesman John Gelson said: "The safety of our passengers is of paramount importance while travelling on any National Express East Coast train service.

"There are safety procedures which our staff are trained to follow and on this occasion the correct process was followed by our onboard crew after a passenger stated they had been threatened by another passenger on board the train."