The government could close the Northern railway franchise if the performance does not improve, the transport secretary, Chris Grayling, said after more than a year of suffering for passengers.
The North has faced intense scrutiny over the past year as travelers have been plagued by delays and cancellations.
The parliamentarians ask the transport selection committee if the North should be deprived of the franchise, Grayling said: "If the North cannot deliver, we obviously look at all the options".
He added: "I will not recover from taking away a franchise if it is the right thing to do and if I have the contractual basis to do so. We are watching and we will continue to follow the performance of the North very carefully in all respects, and I expect that they stand by what they are committed to. It hasn't been good enough so far. "
The government has faced repeated calls to remove the franchise from the North, which is ultimately owned by the German state company Deutsche Bahn.
In May, the mayors of Greater Manchester and the city of Liverpool requested the closure of the franchise, claiming to have received assurances that the services would improve by that date.
Grayling, who was appointed transportation secretary by Theresa May after the EU referendum three years ago, acknowledged: "Basically, the infrastructure in the north is not up to the demands of a modern urban railway, and that's just what it should be ".
It is unclear whether Grayling will continue to serve as transport secretary by the end of the month with a new prime minister. Grayling, who supported the farewell campaign, was one of the first supporters of Boris Johnson, the bookmaker's favorite to win the vote of conservative party members.
Grayling faced repeated appeals for his resignation during his term, even after a dispute over an out of court settlement of £ 33 million paid to Eurotunnel. The Department of Transportation has been sued by Eurotunnel for alleged violation of public procurement rules for a contract with leasing company Seaborne Freight and two other ferry companies to provide transportation capacity for emergency medical supplies in the event of failure Brexit agreement.
Grayling, who prefers to leave the EU without an agreement if there is no trade agreement, said he was in favor of fighting the action, but was rejected by a government subcommittee that worried that the NHS would remain without vital drugs.
"Although we would have liked to fight the case in court, we have collectively decided that we could not have jeopardized the supply of goods to the national health service, which is why we have settled," he said.
Northern was contacted for comment.