AVANTI West Coast has had its contract controversially extended for six months after being criticised for regular disruption to services.
The rail operator - which runs services from Glasgow and Edinburgh to London - slashed its timetable last summer after drivers stopped doing overtime and passengers suffered widespread disruption.
There have been calls for the company to be stripped of the franchise due to numerous complaints about reliability and punctuality, with the SNP's Gavin Newlands saying last year that Scotland and the North of England were being treated like "third-class citizens".
But the Department for Transport has said its contract will now run until October 15 under "broadly the same terms and conditions".
It had been due to finish at the end of this month after it was given a temporary six-month extension last October to make improvements.
Passenger groups and rail workers' unions demonstrated outside of the Department for Transport on Monday to denounce the government’s decision.
The RMT union's general secretary Mick Lynch meanwhile has accused the government of rewarding failure.
Transport Secretary Mark Harper said: "The routes Avanti West Coast run are absolutely vital, and I fully understand the frustrations passengers felt at the completely unacceptable services seen last autumn.
"Following our intervention, Rail Minister Huw Merriman and I have worked closely with local leaders to put a robust plan in place, which I'm glad to see is working."
Graham Sutherland, chief executive of Avanti's parent company FirstGroup, said: "We are working closely with government and our partners across the industry to deliver a successful railway for our customers and communities.
"Performance at Avanti is steadily improving and, since the introduction of the new timetable in mid-December, the number of services has increased by more than 40% compared to last summer, with more seats and better frequencies."
We Own It, Bring Back British Rail, the Association of British Commuters, and rail unions TSSA and RMT staged a ‘Kick First Out!’ protest to condemn the contract extension.
They submitted a petition signed by more than 13,000 people to Transport Secretary Harper and are also calling for the TransPennine Express rail franchise to be stripped of its contract when it comes to an end this year.
Last year, amidst record cancellations and delays on the west coast mainline, First Group reported half-year operating profits of £66 million, up from £52 million from the previous six months. Campaigners say this makes it clear "the company cares much more about profits than passenger satisfaction".
Avanti has among the worst ratings in terms of passenger complaints according to the latest Office of Rail and Road statistics.
Johnbosco Nwogbo, lead campaigner at We Own It, said: “It is gobsmacking that the government has allowed ideology to trump pragmatism in our railways and let things get so bad.
“Private rail companies care only about making profits. They don’t care to ensure they are running a service worthy of the huge sums we are now forced to dole out for tickets.
"Mark Harper must now do what he should have done a long time ago and take them into public ownership. Passengers deserve so much better.”
Lynch said the contract should be brought back into public ownership.
He added: “The Government is keeping privatisation afloat regardless of the cost to the rail passengers, rail workers and the taxpayer and the service itself.
“It is quite clear that the West Coast contract should be brought back into public ownership along with the rest of the railway.”
