Britain’s biggest intercity rail operator, Avanti West Coast, will be renationalised in spring, ministers have announced, while new trains could also be publicly owned under plans to reduce costs paid to private firms.

Avanti, which has been one of the worst rail firms in the country for train delays and cancellations, will come under public ownership from 7 March when its contract ends.

Andy Burnham said “enough is enough” for passengers who had put up with a rail service “that has failed them time and time again”.

The Labour government has been nationalising passenger rail services across the country as their contracts have expired, as the public body Great British Railways prepares to take full oversight in 2027.

The transport secretary, Heidi Alexander, formally announced the decision to nationalise Avanti at the “earliest opportunity” in her speech at the Labour conference on Tuesday afternoon, and said the government would also explore bringing trains into public ownership.

Train operators currently lease trains from private rolling-stock companies (roscos) at the cost of several billion pounds a year. Alexander said the practice since privatisation meant train operating companies “saved money upfront, but it also brought significant long-term costs”.

“In 2024, franchised train operators spent over £4bn leasing and maintaining trains they didn’t own – £4bn, that is about a third of the total day-to-day running costs of operating railway services.

“Every Rosco contract includes financing and transaction costs and investment returns, costs which are ultimately borne by taxpayers and passengers.

“So, as we set up Great British Railways, we will explore whether the state can directly own the new trains we order.”

She added: “If GBR owning trains would best serve taxpayers and passengers, then we should do it.”

Unions welcomed the news. The RMT’s general secretary, Eddie Dempsey, said roscos were “sucking much needed money out of the railways and into offshore bank accounts”, adding: “This should be the start of a process of winding up the rolling stock racket once and for all.”

Dave Calfe, the general secretary of Aslef, the train drivers’ union, said it was “a big step forward for our railway”, adding: “Billions of pounds haemorrhage from the network in profits and dividends which could – and should – be invested in our railway and help keep fares for passengers down.”

However, the government said that owning new trains would happen on a “case-by-case basis”, and a rolling stock firm director who had been briefed indicated there was no question of nationalising existing trains.

For now, the confirmed nationalisation date of Avanti brings into public ownership a service which had been notorious with unions and passengers – including the prime minister.

The company connects the north and south of England, with its service running from London to Manchester and Liverpool. It also runs services through the north-west of England and on to Wales, Glasgow and Edinburgh.

The prime minister has previously complained about high prices on Avanti, tickets for peak-time returns from Manchester to London costing as much as £300.

Burnham wrote on social media that “for years, people have been expected to put up with Avanti’s cancellations, delays, overcrowding, and a service that has failed them time and time again”.

“So my Labour government is bringing Avanti West Coast into public ownership at the earliest opportunity in March next year. That means passengers, not shareholders, will come first.

“More investment, fewer delays, and a renewed focus on getting the basics right. We’re putting essential services back in public hands and building a railway that actually works for the people who use it.”

Avanti has the worst punctuality rating for any large rail company in the UK.

Andy Mellors, the managing director at Avanti West Coast, said: “We’re proud of what we’ve achieved over the last six years – from refurbishing our Pendolino fleet and introducing our new Evero trains to running more services than ever before.”

He said the improvements had given “customers greater choice, more capacity and better connectivity, while we’ve continued to innovate to shape the future of the west coast and wider rail industry”.

Earlier this month, Chiltern Railways became the latest train operator to enter public ownership, becoming the sixth to be nationalised under Labour, with the remaining four to follow by the end of 2027. The next operator to transfer into public ownership is scheduled to be Great Western Railway in December.

East Midlands Railway is scheduled to be nationalised between this winter and mid-2027, and the last is CrossCountry, in autumn 2027.