Sea Containers' diastrous tenure had destabilised a key part of Britain's railway network, and it should now be run in the public sector to safeguard jobs and rail services, RMT said.

"Our members will be shedding no crocodile tears over Sea Containers appearing to be on their way out, but they now deserve some guarantees that GNER's plans to slash staff across the franchise will not be allowed to proceed," RMT general secretary Bob Crow said today.

"It makes no sense to allow Sea Containers to continue draining what amount to guaranteed, risk-free profits out of GNER on a management-fee contract when the franchise could be run more efficiently and for everyone's benefit in the public sector.

"The government was adamant that it would not renegotiate the GNER franchise, but that is what they have now done.

"How much better it would be simply to bring GNER operations back in-house and harnesss the revenue for the benefit of the whole industry.

"Refranchising will cost millions for the paperwork alone, and the end result will be another privateer given a licence to drain public money out of the railway industry.

"Other privateers looking at the GNER mess will be grinning up their sleeves in the knowledge that if they get into financial difficulties they too will be bailed out with public money and rewarded with a cushy cost-plus management contract.

"Three of the country's main intercity franchises are now being run on cost-plus contracts which just shovel public money into private bank accounts for no good reason, and makes a complete nonsense of the entire franchising policy," Bob Crow said.