Last year Northern, which operates more stations than any other franchise holder, carried more than 100 million passengers

Northern Rail is months away from financial collapse amid growing anger over poor performance on the busy commuter network.

In the latest blow to Britain’s privatised railways, Grant Shapps, the transport minister, said yesterday that the franchise would “only be able to continue for a number of months”.

Mr Shapps said that a decision would be taken within three weeks on whether to renationalise the line or give the existing operator a new short-term contract under different terms. Last year Northern, which operates more stations than any other franchise holder, carried more than 100 million passengers.

The decision raises the prospect of the government being forced to step in to run a second rail network. The east coast main line franchise was brought into