THE RMT rail union has told the government to take “immediate steps” to bring Stagecoach into public ownership after the company was barred yesterday from bidding for rail franchises.

RMT general secretary Mick Cash has written to Transport Secretary Chris Grayling telling him that the system of franchise bidding has become a fiasco.

The Department for Transport (DfT) has barred the company, which also has a 49 per cent share in Virgin Rail, from bidding on three new rail franchises due to be renewed.

The dispute is centred on whether the government or the franchising companies should pay a £6 billion deficit in railway workers’ pension schemes.

The Pensions Regulator has said that the company must fill the financial void, but train companies claim that they have no responsibility to the scheme and that the task falls with the DfT.

The ban means that all Virgin Pendolino trains are likely to vanish from British railways after their franchising ends.

In the letter, Mr Cash said: “The system is now teetering on the brink, and I would urge you to take urgent action to protect passengers and rail workers.

“I have to warn you that rail workers and their pensions will not be used as pawns in a row between your department and the train companies and we will take all necessary steps to protect our members.”

Mr Cash has also called for a transport industry summit that would seek to resolve the ongoing franchising crisis and ensure the welfare of rail staff.