Great Western, better-known as "Late Western" by its customers, has seen the punctuality of its services drop to just above 82 per cent in the last month.
The train company, which runs trains from London to the West Country, will have to refund season ticket holders five per cent of the annual price - which can top pounds 6,000 - if the service does not improve. The compensation bill would run into hundreds of thousands of pounds.
Privatised in February last year, it had been considered one of the sell- off's success stories, with ticket sales rising more than 10 per cent in the first 12 months.
Recently, however, furious passengers have taken to keeping logs of their experience of the service. One traveller said that of five journeys from London Paddington to Chippenham in Wiltshire, four suffered "significant delays". Another wrote saying that he would not recommend to his board a move from London to Newbury because of the "unreliable train service".
The poor performance has prompted the Southern Rail Users' Consultative Committee, the passengers' watchdog, to summon the company's managing director, Richard George, to explain why services have not improved next week.
The RUCC argues that Great Western has overstretched itself and is trying to run too many services with too few trains. "We think that the company is spreading itself too thinly. It has increased route miles with each new timetable and we have seen services increasingly delayed," said Sean O'Neill, secretary of the RUCC.
Great Western has bought two extra train sets to cope with increasing passenger numbers, but the RUCC points out that they have been used to run the seven additional weekday services that were introduced in the summer timetable.
The company disagrees with the watchdog's analysis. A spokesman said that delays and cancellations could be attributed to problems with the track and signalling. "About 70 per cent of our problems our not of our making," said a spokesman. "We lost a train set as a result of a derailment at Newton Abbott in March and we have had a series of fires near London that have affected services."
Jonathan Bray, campaigns director for Save Our Railways, the rail pressure group, said: "This train company was one of the first to be privatised and is already running into problems. The real problem is that the route needs to be upgraded. That needs a long-term investment plan to provide a higher level of service. Unfortunately there is no sign of that at the moment."
The current performance of the privatised Great Western company falls a few percentage points below that achieved under British Rail.
However, the company points out that Railtrack, which owns the nation's track, signalling and stations, is going to invest pounds 275m in vital resignalling work that will improve the service.
The privatised railway network has taken a battering in the last week. On Tuesday, Connex South Central, which runs commuter services from London to the south coast, was forced to cut more than 350 trains from its flagship route after failing to attract enough passengers to make the line commercially viable.Reuse content