Connex South Central, a French-owned train company, is to axe 58 trains every weekday from its much-heralded south London Metro service as well as 12 every day on two other routes.
The company said that it had only managed to increase passenger numbers by 12 per cent since the Metro service started in January. It has also failed to negotiate a new pay deal with the drivers' union Aslef - which has meant costs were higher than expected and has led the company randomly to cancel many trains at short notice.
Connex will escape penalties over the cuts because they do not affect the minimum service levels to which the company committed itself when it took over running the trains last year.
Passenger groups reacted furiously to the news. Save Our Railways, the anti-privatisation lobbyist, pointed out that the company received more than pounds 3.5m a week in subsidy from the Government, adding that it was unacceptable that Connex South Central was "raking in public money while slashing services".
The London Regional Passengers Committee (LRPC) said it was "amazed and profoundly disappointed" by the cuts, but Connex said it would be running more trains than last winter and was exceeding service requirements on all its routes.
Sir Alan Greengross, chairman of LRPC, said: "One begins to wonder whether the critics of railway privatisation were right to suggest that we, the passengers, would be faced with cuts as soon as the financial going got tough."
More ominously was the response from the passenger franchising director's office, which awarded Connex the contract to run trains. A spokesman said that John O'Brien, the franchising director, was "clearly disappointed that cuts are being made and hoped these services could be restored in the future".
A Connex spokesman argued that there were often changes between summer and winter timetables. However, railway observers noted that on commuter train lines there was no difference in the types of traveller that used the service between seasons.
"The south London services have been reduced partly through lack of demand and partly to improve reliability elsewhere," the company spokesman added.
The cuts also scupper plans for a turn-up-and-go metro system for south London, which is not served well by the capital's sprawling Tube network.
Liberal Democrat Paul Burstow, MP for Sutton and Cheam, pledged to do everything possible to ensure Connex backed down over "unjustified" cuts. "The cuts may be legally permissible but they certainly make no sense in attempting to encourage more people back onto the railways," he said.
"It's simply scandalous that despite receiving millions of pounds each week in government subsidy such cuts are even being considered."Reuse content