Bungling rail operator Govia could be stripped of its Thameslink and Great Northern franchises unless performance quickly improves.
An unnamed government source has claimed the process could begin within weeks, and said bosses at Govia Thameslink Railway are 'drinking in the last chance saloon'.
Passengers on Thameslink and Great Northern have endured more than a month of disruption after a new timetable introduced on May 20 quickly unravelled.
In the ensuing thousands of trains have been delayed or cancelled.
Govia Thameslink could be stripped of its Thameslink and Great Northern franchises if their services don't improve
Govia says it was presented with the timetable at such short notice that it has not had enough time to train up drivers on new routes - leading to a shortage of drivers.
But is has been criticised for being slow to get to grips with the crisis.
While Northern has already introduced a new interim timetable for passengers across Northern England, a new revised timetable will not be introduced on Thameslink and Great Northern until July 15.
If this does not lead to a much improved service, Govia could be effectively fired from its contract - which due to run until 2021.
Behind the scenes, ministers are ramping up the rhetoric- with transport secretary Chris Grayling reported to have said Govia's bosses have 'run out of runway'.
An unnamed government source also told the BBC: They are now in the last chance saloon.'
But the tough talk was dismissed as 'empty rhetoric' from a government which has also been heavily criticised for the timetable shambles.
Mr Grayling has already said publicly that Govia and Arriva -which runs Northern rail - could be stripped of their franchises if an independent investigation into the debacle finds they have breached their contract.
Mick Cash, general secretary of the Rail, Maritime and Transport Union, which has sought to capitalise on the chaos by imposing more strikes, said: 'Telling these basket-case companies that they are