Union chiefs have demanded the return of the East Coast rail routes to public ownership after current operator signalled heavy losses from running the franchise.

Rail union the RMT called for East Coast to be re-nationalised after rail and bus giant Stagecoach booking £84.1m in exceptional costs to “provide for anticipated losses” under the East Coast contract, which it jointly runs with Virgin. Stagecoach said pre-tax profit plunged from £104.4m to £17.9m in the year to April 29

RMT general secretary Mick Cash said: “RMT warned that re-privatising East Coast, after it had been successfully run in the public sector following the last private failure, was a gamble doomed to failure. We have been proved right.

“This is the third private operator to run the vital East Coast inter-city routes into the ground and rather than waiting for the inevitable financial collapse it should be brought back into public ownership immediately.”

Stagecoach chief executive Martin Griffiths said the company was now in talks with the Department for Transport regarding its “respective contractual rights and obligations under the current Virgin Trains East Coast franchise”.

He added: “We are disappointed to report losses at Virgin Trains East Coast. However, I am confident that we can return the business to profitability.”