Ministers will pledge to reopen closed rail lines in the north this week as the government prepares to renationalise the failed Northern franchise.

The promise of hundreds of millions in investment to restore some lines axed in the Beeching closures in the early 1960s will come at about the same time as the expected announcement of the termination of the Northern franchise, operated by Arriva.

Blyth Valley, a former Labour stronghold in the north-east that turned Conservative in the election and presaged the collapse of the “red wall”, is likely to be among the first places to benefit from the reopening of passenger services.

The decision to renationalise Northern, which the transport secretary, Grant Shapps, is due to deliver by Thursday, is likely to be welcomed in the north, but it represents another embarrassing failure of the privatised rail system.

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Northern politicians and transport bodies said a possible short-term management contract for Arriva – still yet to be officially ruled out by Shapps – would be unacceptable, leaving it almost certain that it will become the second major franchise to be renationalised by the Conservatives in less than two years. The state-owned “operator of last resort”, which has run LNER since June 2018, would take over the running of Northern.

The franchise was awarded in 2016, but plans to improve services have foundered on the back of delays to infrastructure, including track electrification, and a long-running dispute with unions leading to widespread strikes. Punctuality and reliability collapsed around the introduction of the May 2018 timetable and have largely failed to recover.

The results of the national rail passenger survey, due on Tuesday morning, are – despite official questions over its statistical relevance – likely to highlight increasing dissatisfaction with the Deutsche Bahn-owned train operator, as well as widespread discontent around the network.

But in an effort to regain political impetus, and following the promise of “levelling up” the regions post-Brexit, the Department for Transport will this week set out details of lines that could be reopened.

Earlier this month, Shapps visited Blyth, where he discussed a £100m council blueprint for the reintroduction of passenger services on a Northumberland rail line linking Newcastle to Ashington via Blyth, currently partly used for freight services. He said there was £500m set aside for reopening lines.

A project to restore the line linking Poulton-le-Fylde, near Blackpool, to Fleetwood, visited by Boris Johnson in November on the election campaign, is also likely to be a prime candidate for funding.

It could be the second time in a little over two years that the government has talked of reversing Beeching cuts to mask the collapse of a rail franchise. In November 2017, the plan to reopen old lines was announced by Chris Grayling, the then transport secretary, on the same day the government published plans to rip up the Virgin-Stagecoach East Coast rail franchise – which was eventually nationalised in June 2018.

Grayling invited proposals from local partners to pitch for funds to reopen lines where there was a strong business case.

More than 4,000 miles of track were removed from the British railway – about a third of the entire network at the time – on the guidance of the reports by Richard Beeching in the 1960s.

Labour’s shadow transport secretary, Andy McDonald, said: “The Tory claim to be reversing the Beeching cuts is risible. Passengers haven’t forgotten that this is a government which has cut hundreds of millions of pounds of rail investment.”

Meanwhile, there are fears in the north that it could be the victim of cuts to the HS2 high-speed rail network, as the government considers whether to proceed with the full route. Forecast costs are now reported to be estimated as high as £106bn in the Oakervee review, and the second phase north of Birmingham would be easier to cut.

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• This article was amended on 28 January 2020. An earlier version stated incorrectly that the project visited by Boris Johnson during the election campaign aimed to restore the line linking Blackpool to Fleetwood. The proposed line is from Poulton-le-Fylde to Fleetwood.