The biggest train operator in Britain is racing to avoid nationalisation as it struggles to overcome accounting failures in time to renew its contract.

Plans have been drawn up to take Govia Thameslink into public control after its co-owner, Go-Ahead, on Monday delayed its accounts for a second time following a scandal at another of its rail franchises.

The accounts will now be published by the end of February – leaving little space ahead of a March deadline to agree a new contract to run Govia Thameslink, which covers the Southern, Thameslink and Great Northern lines and accounts for roughly one in four UK train services.

Although ministers are keen to secure a renewal, nationalisation is being considered as a last resort. Another option is believed to be extending an emergency funding deal designed to keep services running during the pandemic.

A spokesman for Go-Ahead said: “We are in discussions with the Department for Transport about a new contract to run Govia Thameslink.”

A source added that it was not uncommon for rail negotiations to “go down to the wire” and they were confident of a deal being struck.

Go-Ahead was meant to publish its annual accounts by the end of December, but delayed this until January after uncovering a failure to return £25m owed to taxpayers at its Southeastern rail business in autumn. Shares in the former FTSE 250 firm have been suspended since the start of the year. 

On Monday, Go-Ahead said: “Publication is now expected to be before the end of February 2022.”

The delay will leave as little as a month to agree a new contract on Govia Thameslink before its current deal runs out on Apr 1.

Whitehall officials are locked in talks with rail executives from the operator to agree a so-called national rail contract. Typically new contracts of this type are agreed many months in advance.

But the Government is yet to complete an investigation into Southeastern, which was previously owned by Go-Ahead and Keolis and has now been nationalised.

The two operators are facing further penalties. The finalisation of these is thought to be partly behind Deloitte’s unwillingness to sign-off Go-Ahead’s accounts.

A Government source said: “Our ongoing investigation into London South East Railway will determine whether it is appropriate to enter into this contract nearer this expiry date. The ‘Operator of Last Resort’ is always available if required in accordance with the secretary of state’s statutory obligations.”

As well as Southeastern, Northern and east coast mainline LNER have been transferred into state control in recent years. The Welsh railways were nationalised in 2020 and Nicola Sturgeon will take over the Scottish train network in March.  

The Government has created a shell company to take over Govia Thameslink if it is unable to come to an agreement in time. Thameslink Southern Great Northern Limited was incorporated in April 2020 with four Department for Transport civil servants acting as directors, according to Companies House filings.

One industry insider said that the scramble to agree a new contract for Govia Thameslink is likely to be complicated by a power struggle within Whitehall over the running of the railways. “There’s going to be an amount of politics involved,” they added.

Questions remain, however, over whether the Government will have the capacity to take on another rail network, especially one as big as Govia Thameslink.

One adviser to the Department for Transport said: “[The question is] do they have the manpower available?”

The Government declined to comment.