Northern Rail could be stripped of its franchise by the end of the month, the Government has announced.
Transport Secretary Grant Shapps said the franchise would only be able to continue "for a number of months" according to most recent financial information.
And he said he hoped to make announce the decision on whether to strip them of the franchise by the end of January.
It comes after a year of chaos and cancellations across the network - and on the day rail fares were hiked by an average of 2.7%.
Some long-distance commuters saw the annual cost of getting to work increase by more than £100 on Thursday despite fewer than two-thirds of trains being on time last year.
Last year, Northern's on-time statistics ran at 57% - giving commuters just over a one in two chance of their train running on time.
Mr Shapps said he had requested a proposal from Arriva Rail North (ARN), who currently operate the route - which is currently being "evaluated."
After the evaluation is complete, he said, it will be decided whether the government should step in and take the route over.
In a written statement to Parliament, Mr Shapps said "Passengers in the north have had to put up with unacceptable services for too long. We understand how frustrating this has been for people and we are taking action to make sure that performance improves.
"On 16 October 2019 I informed the House, through the Transport Committee, that I had issued a request for a proposal to the current Northern franchisee, Arriva Rail North (ARN) and to the Operator of Last Resort as the first phase of securing options for the continuation of passenger services on the Northern franchise. This was triggered by concern over the financial position of ARN.
"It has now been confirmed to me from the most recent available financial information that the franchise will only be able to continue for a number of months. The proposal I requested from ARN is being evaluated.
He added: "Following completion of this process I will consider whether to award ARN a short-term management contract or whether to ask the Department of Transport’s own Operator of Last Resort to step in and deliver passenger services.
"Longer-term decisions on the franchise will be made in the light of the recommendations of the Williams Rail Review."
