A rail firm could be taken in to public ownership should it fail financially, the government has said.
Transport Secretary Grant Shapps said South Western Railway's (SWR) franchise was now "not sustainable in the long term"
The
company recently declared a £137m loss.
Contingency measures include issuing a short-term contract to SWR's owners or moving its operations to the Department for Transport, Mr Shapps said.
SWR services were disrupted for 27 days in December by the latest in a series of strikes over the future of guards.
Transport Secretary Grant Shapps said SWR had "not yet failed to meet their financial commitments" but the department "must prepare suitable contingency measures".