One of Europe’s biggest train operators could pull out of Britain after racking up a £20m loss, The Telegraph understands.

Despite running the country’s most punctual service, the London to Essex c2c franchise went into the red in 2019 after forecast passenger growth failed to materialise.

Italian operator Trenitalia is desperate to change the terms of the line’s contract, and is in talks with the Department for Transport, according to insiders.

The “Operator of Last Resort” is monitoring c2c’s financial position, sources said. The state-owned rail lifeboat renationalised Northern last month and LNER in 2018.

Company executives are understood to be angered by “rigid” contractual obligations that fail to take into account flexible working habits that mean staff are more likely to work from home than commute into the office.

Trenitalia’s frustrations could have wider implications.

Insiders claimed that if the firm did not receive the necessary concessions from ministers on c2c, it may decide to withdraw from the UK completely.