Theo Taifalos, the chief executive of V/Line, has resigned after losing the confidence of the Andrews government, as a crisis continues to grip the state's regional rail operator.

Seventy train services a day have been replaced by coaches until further notice because of rapid wheel wear on VLocity trains and all but a handful of Gippsland services are banned from the city limits because of a dangerous boom gate malfunction in Dandenong.

V/line is in crisis with 70 train services a day being replaced by coaches.

Public Transport Minister Jacinta Allan said Mr Taifalos had resigned this morning.

Ms Allan said she was furious about the wheel wear problems, having been given false advice by V/Line last week that a solution to the problem was imminent and that services would begin to return to normal by the end of this week.