Robert Mohamed stands on platform three at Haywards Heath station wearing a well-cut navy suit, a small backpack and the zen-like calm of a man accustomed to things going wrong. He is waiting for the 8.15am service to Victoria, a 50-minute journey from mid-Sussex into the heart of London. On a good day, he can get from his home nearby to his desk in Mayfair, where he works for a hedge fund, in little over an hour.

“Not any more,” Mohamed says. As he speaks, the delay to his train leaps from four to six minutes, and keeps counting. He glances at the display before switching into an equally familiar mode. Let’s call it angry resignation. “I turn up here and I don’t know if my train is going to be cancelled, or when I’m going to get to work. And it’s carnage coming home. I lose at least an hour and a half to this every day.” For this he pays almost £5,000 a year.

It’s hard to think of a company today that is as unpopular as Southern rail. From the home counties to London’s suburban capillaries to the throbbing terminals at London Bridge and Victoria, passengers describe fury and misery, and a network in extremis.

After weeks of delays and cancellations, and the catastrophic breakdown of relations between staff, passengers and the operator, Southern announced this week that 341 of its services will disappear every day, from Monday until further notice. The figure accounts for 15% of the operator’s almost 2,300 daily services. One service – the popular commuter line from Milton Keynes to Clapham Junction – will be scrapped entirely. The Gatwick Express can no longer claim to serve the airport once every 15 minutes. Stories abound of tearful breakdowns, missed flights and bedtime stories left unread. As crowds gather in Brighton for the morning rush to London, Southern staff in blue tabards hand out leaflets explaining the changes. Many passengers also clutch a copy of Metro. “MELTDOWN” is the headline on the front page. The article goes on to report that people are being fired after repeatedly arriving late for work.

‘I lose at least an hour and a half every day’ … Robert Mohammed, who previously worked on rail privatisation, but now believes they should be renationalised. Photograph: Alicia Canter/The Guardian

Pardeep Singh, a solicitor who commutes to London with his fold-up bicycle, has understanding bosses. But, he says, “it’s difficult being late to work every day and having to leave before everyone else”. Cancelled trains, which already number as many as 250 a day, make the surviving services crowded, and Singh says he routinely has to stand up all the way to London. He pays £400 a month for the pleasure. “We’ve even had to adjust the kids’ routine so they’re going to bed later because I want to see them,” he adds. “The British attitude is: ‘All right, let’s get on with it – it’s life.’ But there’s just no end to it.”

Tracing the cause of the chaos is complicated, and raises big questions about modernisation, population growth, budget cuts and union power. “There is no doubt that this is a seminal dispute and a key battleground,” says Christian Wolmar, the rail commentator and historian. The under-fire rail minister Claire Perry, who has shown remarkable loyalty to the failing franchise, might call Southern’s cancellations a “robust battle plan”, but Wolmar is blunt. It is, he says, a “panic gesture” almost unprecedented in scale.

It’s worth first considering the peculiar nature of Govia Thameslink Railway’s franchise. When, in 2014, the Department for Transport recognised that any operator would face significant challenges with long-term engineering works around London, it awarded the Southern franchise as a management contract. In simple terms, this means the company gets paid to operate a service, but the government takes on the financial risk. In effect, GTR has a smaller incentive to satisfy customers, few of whom can choose another train company – because there isn’t one. “If the revenue risks were with management, they wouldn’t dare cut vast amounts of services or take on the unions in this way,” Wolmar says.

‘It’s difficult being late to work every day and having to leave before everyone else’ … Pardeep Singh, Brighton to London. Photograph: Alicia Canter/The Guardian

But GTR says it has no choice but to cancel services, because of the ongoing industrial dispute about Southern’s growing reliance on driver-only trains. The transport workers’ union, the RMT, says the disposal of highly trained conductors in favour of “on-board supervisors” is a safety risk, while workers fear the move will lead to future job losses. (GTR denies both these claims.) A series of strikes has made life even worse for passengers. The response of management – to withdraw several employee benefits – has in turn worsened morale. Staff say this and mounting workplace stress have contributed to growing levels of sickness, further exacerbating existing staff shortages. The company, and the government, have implied that the sick days constitute unofficial strike action, deepening mutual resentment.

“When you’ve got a captive audience, I think it’s morally wrong to have franchises that are geared to line the pockets of company directors,” says Mohamed, who is still waiting at Haywards Heath. This morning he will be less than 15 minutes late to work, which is a good result. He confesses that he had a role in the finances of rail privatisation in a previous job with Deutsche Bank, but now shares the view of many MPs in the region, including Caroline Lucas in Brighton, who has demanded that the GTR franchise be renationalised.

‘I can’t keep doing this. It took me four hours to get to London one day’ … Elaine Thambiah, Brighton to London Bridge. Photograph: Alicia Canter/The Guardian

Wolmar expects that GTR and the RMT will soon reach a compromise, and believes the dispute is an important test case for the unions, who are resisting moves to driver-only trains elsewhere. But he is not convinced by the case for state intervention. “I think it’s a bit of a misplaced idea that nationalising the railways would solve this problem, because it’s the government that is partly driving it,” he says. “These cancellations don’t look good for GTR, but the fact that the Department for Transport has allowed them to do it doesn’t look good either.”

Since John Major presided over privatisation between 1993 and 1997, Britain has become a complex patchwork of franchises, rolling-stock owners and service operators. Almost 30 operators run trains, many with government subsidies. Only twice has the government temporarily taken control of struggling franchises, most successfully when it ran the East Coast line from 2009 until Virgin won the contract last year. Polls show significant popular support for full renationalisation (66%, a YouGov poll found in 2013), and not just among despairing Southern passengers.

Still, the operator’s current woes are fast becoming a test case for customer tolerance. A small but vocal group of passengers staged a protest in Brighton station after an evening rush hour last month (several would-be demonstrators were missing it because their trains were delayed). A larger protest against the service cuts is planned to take place at Victoria on Monday. Still others have taken to blogs and social media. David Boyle writes books about business and travels to London from Shoreham-by-Sea in West Sussex. More than 100,000 people read a post he wrote on his personal site, the Real Blog, about Southern last month. It triggered a flood of emails from despairing passengers and staff, many speaking anonymously.

“My main impression has been just how much frontline staff feel they’ve been abandoned to face the consequences of this chaos, and to deal with dangerously crowded platforms and trains,” Boyle says. He has since collated much of the testimony and combined it with his own account in a self-published ebook called Cancelled! “Staff who have spent their whole careers taking pleasure in getting a train in on time tell me they now feel humiliated by the chaos and let down by managers,” he says.

Boyle, who in 2012 conducted an independent review for the Treasury into choice in public services, says he has no problem with privatisation in principle, but adds: “It has to be transparent and accountable. Too often, arms-length operators have been contracted without the experience or skill to do the job. It doesn’t help when ministers are incompetent, too.”

Last week, Louise Ellman MP questioned GTR’s bosses and Mick Cash, head of the RMT, about the crisis in a session of the transport select committee, which she chairs. “People running a franchise have to do it in the public interest, and that isn’t happening,” she says. “The problem with staff shortages started long before the industrial action. I think it’s time ministers became more involved and didn’t step aside from the consequences of the contract they created.”

‘It’s been horrendous. I get up at six and get home at half-eight’ … Sarah Govier, Brighton to London. Photograph: Alicia Canter/The Guardian

Yet the Department for Transport has stuck by GTR, and has been aggressive in its response to the union. “We have got to break them,” Peter Wilkinson, a senior government rail official, said of drivers at a public meeting in Croydon last February. “They have all borrowed money to buy cars and got credit cards. They can’t afford to spend too long on strike, and I will push them into that place. They will have to decide if they want to give a good service or get the hell out of my industry.” Wilkinson later apologised for the outburst. More soberly, the Department points out that it has charged GTR more than £2m in penalties, and insists that any change of management would not be in passengers’ interests. GTR blames the disruptions on the industrial dispute, adding, in a statement, that “the rail minister has said there’s no one better placed to run this franchise. Anyone in our place would be facing the same challenges, and we are doing our very best to overcome them.”

Back in Brighton, where the 7.30am to Southampton has been cancelled due to staff shortages, Elaine Thambiah is trying to get to London Bridge. She works in IT in Moorgate in the City of London, but her boyfriend lives in Brighton and she is reconsidering her career. “I’m trying to move my job here because I can’t keep doing this,” she says. “It took me four hours to get to London one day two weeks ago, and sometimes I have to drive to Woking to get a South West train into London.”

“The last month has been horrendous,” says Sarah Govier, who works for a travel company in London, and has managed to find a seat on the train to London. “I get up at 6am and get home at 8.30pm. And I’m lucky because my work is flexible. I can’t imagine what it’s like if you have kids.”

Later that day, the station clock ticks past 5pm, and London Victoria begins to fill up. Faces gaze at departure boards. Of the first five trains due to depart, all but one have been cancelled or are delayed. Eyes roll, phonecalls are made. Southern’s new soundtrack is stuck on repeat: “We are sorry to announce … ”

Darren Ling was hoping to get home to Chichester for his kids’ bathtime, something he always used to do. But Southern keeps diverting his Southampton train to Bognor, requiring a lengthy change before he can finish his journey. “I won’t get to see them again because they’ll be in bed,” he says as he heads for his platform. “And my wife won’t be able to collect me, so I’ll have to pay for another taxi.” Ling, who works in sales, doesn’t yet know how the emergency timetable will affect him. “I have a meeting on Monday morning and I don’t know if I’m going to get there. And the worst thing of all? I can’t do anything about it – I’m totally powerless.”