"Tough action" promised by the government against rail operator Govia Thameslink could extend as far as removing franchises unless it improves its dire recent performance for commuters in the South East.
Transport secretary Chris Grayling could strip franchises within weeks, after the introduction of a new timetable on 20 May caused widespread disruption, the BBC reported.
The Office of Rail and Road is set to run an independent inquiry into the chaos, with commuters dealing with cancellations, delays and switching of services.
While the Department for Transport (Dft) does not yet have evidence of negligence by management at Govia Thameslink Railway (GTR), if the inquiry does blame the firm a government-owned body could take back control of the Thameslink franchise.
GTR chief executive Charles Horton resigned a fortnight ago after the extent of the debacle became clear.
GTR runs the largest rail franchise in the UK in terms of passenger numbers, trains, revenue and staff, with 273m passenger journeys each year, according to its website. It links London, Cambridge and Brighton, as well as running trains to Luton and Gatwick airports.
The government is already running the London to Edinburgh East Coast line, after removing previous franchise holders Stagecoach and Virgin Trains.
Further punishment for the firm may include a month’s worth of free travel for commuters. The government has already announced that passengers on Northern services in Lancashire, Greater Manchester and Cumbria will receive a cash payment equal to a month’s travel in addition to standard punctuation for delays.
A GTR spokeswoman said: "We are sorry for the disruption which we are working very hard to fix. We are doing all we can to improve things for our passengers in the coming weeks.
"This includes working with the DfT and Network Rail on the new interim timetable for Thameslink and Great Northern which will operate from 15 July. This interim timetable prioritises peak-hours services and reduces service gaps. This is a key stage in our work to provide a more reliable service to passengers over the coming months."
The possible removal of the Thameslink franchise follows weeks of political pressure on Grayling to sort out chaotic trains across the country. Labour has called on Grayling to resign, while Conservative colleagues have also been critical of the terrible service.
A DfT spokesperson said: “GTR passengers are encountering unacceptable service levels and the Transport Secretary and Rail Minister have been clear it is their priority that this is put right as soon as possible and passengers are compensated for the disruption.
“We will investigate whether GTR have breached their contracts and we won’t hesitate to take tough action against them if they are found negligent.”