East coast mainline is set to be back under public control instead of its current operators Virgin and Stagecoach, who had failed to meet its payments.

According to a statement, Stagecoach said it has been told that an “operator of last resort” would be appointed to run its London to Edinburgh service.

Stagecoach has been operating the East Coast line alongside Virgin Trains since 2015.

The East Coast mainline franchise is a joint venture of Stagecoach, which owns 90%, and Virgin, which holds 10%.

The temporary denationalisation of the service is contrary to much of the stances adopted by the conservatives, who are most associated with privatisation, since its mass occurrence under the Thatcher government.

The government transport secretary Chris Grayling confirmed the news in comments to Parliament on Wednesday.

Amid speculation of the decision last week, general secretary of Aslef, the train drivers’ union, Mick Whelan commented:

“This is the third time in 10 years that a private company has mucked up the east coast main line. In contrast, when it was run in the public sector, it returned £1bn to the Treasury.

“That shows what we have been saying all along – that Britain’s railways should be run, successfully, as a public service, not for private profit. Because they can’t do it. Virgin and Stagecoach have managed reverse alchemy – by turning gold into base metal, and profits into losses on the east coast.”

This is a developing story.