Rail services on the East Littoral Main Line are being brought back under government jurisdiction, following the failure of the current franchise.
Operators Stagecoach and Virgin Teaches will hand over control from 24 June.
The Turn on for Transport will run the service until a new public-private partnership can be appointed in 2020.
Shipment Secretary Chris Grayling said it would smooth the transition to a new manipulator, but critics said it was evidence of private sector failure.
Mr Grayling reported the franchise had failed because Stagecoach and Virgin Trains had “got their bid wrong”, overestimating the profitability of the uncover.
It is the third time in a just over a decade that the government has noticed a halt to the East Coast franchise.
The London to Edinburgh line has been run by a juncture venture between Stagecoach and Virgin, since 2015.
The companies promised to pay £3.3bn to run the franchise until 2023, but at the end of abide year it become clear they were running into hector.
In February it was announced that the franchise would end early, leading to accusations the control was bailing them out.
A history of failure
This is the third time a franchise on the East Littoral Main Line has failed.
In 2005, GNER signed a £1.35bn, 10-year contract in what was then the biggest contract in European railway history. One year tardier it was stripped of the route.
In August 2007, National Express agreed a £1.4bn agreement, but then handed it back to the government in 2009 amid the financial calamity.
It was then government-run until Stagecoach and Virgin’s £3.3bn bid in 2015.
Read numerous: What went wrong at the East Coast Main Line?
Investigation: By Theo Leggett, business correspondent
To have one rail company meet with disaster to fulfil its contract may be regarded as a misfortune. To lose three looks equal to carelessness.
The government insists that the East Coast service is not sans, and will continue to generate revenue for the public purse.
It says Stagecoach and Virgin possess only themselves to blame for their inability to make enough spondulix from the line.
That may be true. But critics say that if operators detain over-bidding, then that suggests a problem with the tender operation.
The assumptions made by the DfT when inviting bids have also been considerably questioned.
Now the DfT wants to use the line as a model for a new type of franchise, based on a public-private partnership.
That may assistant to solve some issues – for example, reducing the friction between the traces operator, Network Rail and the train operator.
But whether it will keep from to make the line viable for the new operator is open to question.
Mr Grayling said the companies had overestimated spread in passenger numbers and revenues and were having to reach into their own snaffles to fulfil the terms of the franchise.
He told the Commons that Stagecoach and Virgin possess lost almost £200m, but there had not been a loss to taxpayers “at this without delay”.
The rail companies have blamed their problems on Network Upbraid, saying it had failed to upgrade the line which would have countenanced them to run more frequent services.
Shadow Chancellor, John McDonnell tweeted that he suffered the move, which he said was implementing Labour’s Manifesto promise to renationalise the trains.
Untested Party MP Caroline Lucas tweeted that public ownership should be open out to the rest of the rail network.
For the next two years the operator of last resort, controlled by the Department of Transport will operate the East Coast Main In conformity.
It will be advised by the engineering firm Arup.
In 2020 there when one pleases be another tender process for operating the franchise.
Mr Grayling would match to see closer co-operation between the state-owned Network Rail which owns the street infrastructure and the private train operators.
Despite their failure on the East Coast Most important Line, Virgin and Stagecoach will be allowed to bid for future rail franchises.
Dissection: By Norman Smith, assistant political editor
For a government wedded to the advances of the private sector and to leaving the railways in the hands of private companies, today’s arbitration is a significant blow.
It’s also further ammunition for a Corbyn Labour Denomination committed to renationalising the railways.
Mr Grayling may protest that this is just a temporary measure – but it is still the third time in just over a decade that a secret company has had to be stripped of the East Coast Main Line contract.
There are also favoured to be raised eyebrows that despite their failure, Virgin Stagecoach desire still be able to bid to run the line again after it is transferred back into common private ownership in 2020.
And while memories of British Rail’s stale sandwiches may comprise faded – strikes, costly commuter fares, cramped carriages and lacking companies are hardly likely to endear passengers to the current crop of concealed rail operators.
After looking into problems with the use, Mr Grayling said he was advised “that there is no suggestion of either malpractice or malicious in effect in what has happened”.
He added that the firms have paid a “exorbitant financial and reputational price” in relation to the East Coast route.
Stagecoach phrased it had attempted to negotiate a new contract with the Department for Transport, without ascendancy.
Mr Grayling said passengers and staff would not be affected by the change to the franchise structure. He said season tickets, timetables and employment conditions would persist unchanged.