A consortium led by the company’s biggest shareholder, Spain’s Cosmen family, withdrew its £765 million offer for the struggling transport group yesterday.

National Express shares slumped by as much as a third on the news, wiping almost £250 million from the value of the company at one stage.

The RMT union greeted the news by calling for the Government to intervene to end the “shambles” of National Express’s rail operations.

Bob Crow, the union’s general secretary, said: “It’s time to end the soap opera over National Express’s rail operations and to clear them off the tracks before any lasting damage is done.

“The collapse of the takeover bid just throws up more uncertainty and instability and now is the time for the Government to step in and set an immediate timetable for the re-nationalisation of East Coast Main Line.

“The whole fiasco on the East Coast Mainline has turned the spotlight on the continuing chaos of rail privatisation and underlines why over 70 per cent of the British public support re-nationalisation of our railways.”

National Express announced in the early summer it was set to default on its franchise, and the Government said it would renationalise the route temporarily until a fresh franchisee could be found.

The announcement raised fears for the future of 100 employees who work at the company’s HQ in Skeldergate.

Prime Minister Gordon Brown said the publicly-run company would remain based in York, but concerns remain that if a new franchisee is subsequently appointed, it might base the headquarters elsewhere.

A Government spokesman said the timetable for re-nationalisation would effectively be set by when NXEC announced it was defaulting on the franchise, but the publicly-owned company would be ready to take over, whenever that was.

An NXEC spokesman said it expected to continue operating the route until early-mid December. The company said it continued to perform “resiliently” despite challenging trading conditions, and it was in talks with major shareholders over the fundraising to ease its £1 billion debt pile and give the group a “strong, stable platform”.

Chamber’s teardrop fears

COUNCIL chiefs have been warned not to pin all their hopes for the city’s future economic prosperity on the £1 billion pound York Central scheme.

The York and North Yorkshire Chamber of Commerce fears the recent shelving of the redevelopment project for the teardrop site behind York Railway Station could leave the city short of commercial and housing land.

Chamber president Shaun Watts said: “Placing all of our hopes on the York Central site is putting our city at risk.”

Mr Watts said that unless enough alternative sites were available, there was a risk of a shortfall of commercial properties to accommodate new and growing businesses, and of residential properties to house workers.

Chamber director Richard Flanagan said as York emerged from the recession, new and larger accommodation would be needed to accommodate new and growing businesses.

The chamber was responding to City of York Council’s Local Development Framework Core Strategy, which will shape York’s development over the next two decades.