The rail industry believed “until the last moment” that it could successfully introduce the new timetables that have led to major disruption, Transport Secretary Chris Grayling said.
He accepted people would find that “hard to understand”, amid mass cancellations and delays on Northern and Govia Thameslink Railway (GTR).
In a statement in the Commons, Mr Grayling revealed that GTR “assured me personally that they were ready” just three weeks before services were rescheduled on May 20.
“Clearly this was wrong and it is totally unacceptable,” he said.
“The rail industry has collectively failed to deliver for the passengers it serves.
“It’s right that the industry has apologised for the situation that we are currently in and that we learn the lessons for the future.”
Mr Grayling faced repeated calls from Labour MPs, who branded him “utterly pointless”.
Conservative MPs focused their ire on the rail industry rather than their party colleague.
Mr Grayling reiterated previous comments about Government-owned Network Rail being “very late” to finalise new timetables and not completing infrastructure upgrades in time on Northern routes.
But he also attacked the private train operators, saying that Northern and GTR were “not sufficiently prepared”.
GTR did not have enough drivers with the route knowledge required to operate the new timetable and “neither Northern nor GTR had a clear fall-back plan”, he told the Commons.
The process of introducing the new timetable was overseen for the last two years by an Industry Readiness Board, made up of Network Rail, the Office of Rail and Road and the train operators, and an Independent Assurance Panel.
“Both of these groups have told me that they had been given no information to suggest that the new timetable should not be implemented as planned – albeit with some likely early issues as the timetable bedded down,” Mr Grayling said.
“It should have been clear to them that some key parties were not ready. They did not raise this risk.”
Mr Grayling announced that the Department for Transport would assess whether GTR and Northern “met their contractual obligations in the planning and delivery of this timetable change”.
In relation to GTR, this would include its “eligibility to hold a franchise bidding passport”, which is a requirement to bid for future rail contracts.
The ORR will also carry out a full inquiry.
A “compensation scheme” will be introduced for passengers on affected routes which will be funded by the industry to ensure “regular rail customers receive appropriate redress”, Mr Grayling said.
Northern and GTR launched interim timetables on Monday, removing 165 and 230 daily services respectively. This is around 6% of all services.
The reduced timetables failed to stop Monday becoming the start of a third week of rail chaos with the number of trains either cancelled or more than 30 minutes late for Northern and GTR reaching 133 (6%) and 171 (7%) respectively by 7pm, according to the trains.im website.
The timing of all GTR and most Northern trains was changed on May 20 with the launch of new services and capacity.
Even before the new timetables, Northern services suffered frequent delays and cancellations.
New Network Rail punctuality data shows that between April 29 and May 26, more than one in three (35%) trains on the operator’s Lancashire and Cumbria routes were delayed by at least five minutes.
This is the most since Arriva Rail North took over the franchise in April 2016.
Mrs May’s official spokesman said the Government wanted the inquiry under ORR chairman Stephen Glaister to deliver initial findings “as early as we can possibly see them” and to publish a report as soon as possible.
Responding to calls for Transport for the North to be given full powers over the region’s railways, the spokesman said: “The Transport Secretary set out yesterday what happened in this instance.
“Network Rail finalised the timetable much too late and GTR and Northern were not prepared to manage the timetable change and did not raise a warning that they were not prepared.
“The key priority now is working with the train companies so they can restore a stable service for passengers.
“We have given Transport for the North unprecedented powers to influence decisions about transport investment in the North and to set out the North’s unified strategic transport plan which the Secretary of State must take into account in exercising his role to maintain coherence of the national network.
“TFN is already playing an important role overseeing the Northern and TP (TransPennine) franchises, but TFN can request additional functions at any time, with the consent of all its members, and it’s important to note that TFN’s current powers reflect exactly what Transport for the North requested.”