(Photo by Julian Finney/Getty Images)
Transport Secretary Grant Shapps said there was clear evidence the operator had breached the “good faith” obligation relating to financial matters.
He said his department had uncovered evidence that the operator had not declared more than £25 million of taxpayer funding which it should have repaid.
He said: “There is clear, compelling and serious evidence that LSER have breached the trust that is absolutely fundamental to the success of our railways. When trust is broken, we will act decisively.
“The decision to take control of services makes unequivocally clear that we will not accept anything less from the private sector than a total commitment to their passengers and absolute transparency with taxpayer support.”
Southeastern, which is run by Govia, operates 400 trains across London, Kent, East Sussex and the High Speed 1 lines. It runs nearly 2,000 services a day serving 180 stations.
The operator was last granted a licence in September 2020 to run until 16 October 2021. The Government will take over running of services from 17 October but insists the changes will have no impact on staff or passengers.
The Government said that investigations were ongoing and that it would consider more action, including financial penalties.
Following the announcement, Go-Ahead Group, which jointly runs Govia with Keolis, said its chief financial officer, Elodie Brian, had resigned with immediate effect.
The news has prompted renewed calls to end the “failed” rail franchise system and renationalise the country’s rail network.
Rail, Maritime and Transport union general secretary Mick Lynch said: “It appears that this collapse is all about Govia playing fast and loose with their financial commitments and raises serious questions about the viability of their other operations including the busy Thameslink services.
“It’s time to put the rest of Britain’s failing private rail operations out of their misery, cut out the middleman and build a public railway that’s fit for a green, post-Covid future.”
Manuel Cortes, general secretary of the Transport Salaried Staffs Association added: “The days of rail franchising must now be well and truly over. Time and time again we see the private sector fail and taxpayers ride to the rescue.
“We need the Government to dump the failed franchise system, end the profiteering of the train operating companies and take over the whole thing, lock stock and rails.”
In May the Government announced plans to bring large parts of the UK’s rail operations back under its control.
Great British Railways will take over the ownership and maintenance of the infrastructure from Network Rail, will set most ticket prices and timetables and choose private firms to operate services.
It is expected to start operations in 2023.