THE Government would "lose no sleep" about taking away Oxfordshire rail operator First Great Western's franchise, despite a possible loss of premium payments to the Treasury, MPs were told today.

Rail minister Tom Harris said FGW had "let down their customers very badly" and agreed that passengers were right to think of themselves as victims.

But he refuted any suggestion that the Department for Transport had a conflict of interest in that FGW made large annual premium payments to the Treasury to run the franchise.

Mr Harris told the House of Commons transport select committee that the payments would not be taken into account if FGW failed to improve its performance.

He added: "I would not lose any sleep if there is a decision to end their franchise."

Labour MP Graham Stringer said: "People in the South West must be asking why this wretched company is still there. What does FGW need to do to lose its franchise?

"They are due to pay large premiums. Does not that put the DfT in a difficult position?"

Mr Harris said there were indications that FGW was improving its performance and that the company was aware of "this tremendous chorus of disapproval".

Mr Stringer said that if the franchise was terminated, the Government stood to lose a great deal of money. But Mr Harris said that the money would not be lost, because a new franchisee would be appointed.