RAIL services on the East Coast Main Line through York are to be brought back under Government control.

The franchise agreement with Virgin Trains East Coast (VTEC) has been terminated.

VTEC said it was “surprised and disappointed” the Government had chosen not to award it a new deal to continue running services.

Trains will now be run by the Department for Transport (DfT) through an operator of last resort (OLR), called London and North Eastern Railway, or LNER, a brand last used in the 1940s.

Stagecoach pledged to “work constructively with the DfT and the OLR in the weeks ahead to ensure a professional transfer to the new arrangements.”

It is the third time in little more than a decade that the government has called a halt to the East Coast franchise.

Mr Grayling told Parliament that after two months of analysis he had concluded bringing the service back under the control of the Department of Transport was the best option, with a period of state control used to establish a new public-private partnership from 2020, adding that the arrangements would not affect staff or passengers.

York deputy council leader Andrew Waller said the Government must ensure jobs remained in the city, and he would be writing to the Minister to seek assurances and guarantees of stability.

York Outer MP Julian Sturdy said he was confident constituents would notice very little difference day-to-day but he had sought assurances infrastructure challenges would be addressed.