UK nationalises key rail route

London - Britain's government said on Wednesday it would temporarily nationalise the country's loss-making east coast railway line, stripping operator National Express Group of its franchise to run the route.

Rail and bus operator National Express had earlier announced that it was not willing to support the service, which has suffered sliding passenger numbers and dwindling revenues because of the recession.

The group, which failed in its attempts to renegotiate the franchise deal with the government, said it would relinquish control later this year.

Transport Minister Andrew Adonis said he had set up a publicly-owned company which would take over the franchise from when National Express East Coast stops operating.

He also warned that the firm could lose its two other rail franchises as a result, adding: "It is simply unacceptable to reap the benefits of contracts when times are good, only to walk away from them when times become more challenging."

Adonis added that the government intended to seek a new franchise operator from the end of 2010.

The east coast main line railway connects London and Edinburgh via destinations including Peterborough, Doncaster, Leeds, York and Newcastle.

In a further blow, National Express also announced the departure of its chief executive Richard Bowker, who negotiated the east coast franchise deal in 2007.

Earlier this week, the embattled group snubbed a takeover approach from rival British transport operator FirstGroup.

Britain's railways were privatised in the 1990s, one of the last of a wave of sell-offs of state assets by the then Conservative government.

- Sapa-AFP