The troubled rail franchise, currently run by National Express, is suffering from slumping passenger numbers and is expected to have lost £20m in the first half of the year.
Ministers have already refused the company's requests for its contract with the government to be renegotiated.
Existing operational staff will transfer to the new state company which will be set up to operate the route. All current services will continue and tickets will be honoured.
What do you think of this news? Do you use this service? Are you an employee? Will the change make a difference? Can nationalisation work better than private enterprise?
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