The country's largest railway network finally had a new operator today - along with billions of pounds in public subsidy.

Rail chiefs said that preferred bidder Serco-NedRailways would be taking over the new Northern Rail franchise on December 12 - around two months later than planned.

The franchise, to run for up to eight years and nine months, provides inter-urban, commuter and rural services across the North of England. A dispute over the level of public subsidy - set at a massive £2.4bn by the Strategic Rail Authority - is believed to lie behind the delay in signing the contract.

Rail unions said the delay had caused huge uncertainty among the 4,000 staff affected with current incumbents Arriva Trains Northern and First North Western being asked to carry on running services for the time being, even though they lost out to Serco-Ned in the bidding process.