McLoughlin is due in front of parliament this afternoon to outline the plans for the route once Virgin Trains’ current franchising agreement ends on 9 December.
Both Virgin and the state-owned Directly Operated Railways have been putting together teams to run the route.
Neither is expected to know who will do so until shortly before the minister’s announcement to MPs.
Either choice could prove controversial. The RMT union warned last week it could take the Department for Transport to court if Virgin is awarded a short-term extension to its contract, claiming such a move is in breach of EU rules.
But to take the route from Virgin could add to growing costs to the firm, which it could try and claim back if it eventually wins the franchise when the competition is rerun.
The DfT has already pledged to return £40m spent by the four groups that bid for the 13-year contract.
The London-to-Scotland route has been thrown into limbo by faults found in the franchising process after the contract was awarded to FirstGroup in August.
McLoughlin has commissioned two reports, one due at the end of the month and a wider-ranging one expected at the end of the year, to examine exactly what went wrong in the department’s calculations when picking the winning bidder.
Shadow transport secretary Maria Eagle yesterday called on the government to open a fully independent inquiry into the failings.