The contract with the firm running the Caledonian Sleeper will end in June of next year, the Scottish Government has said.

Transport minister Jenny Gilruth said in an answer to a parliamentary question that a new contract with Serco – the firm that has run the service for the past seven years – does not represent “value for money to the public”.

The franchise will end on June 25 but it is not clear who will take over the running of the trains, which offer services from as far north as Inverness to London.

Existing services and timetables will continue until the end of the contract.

The Scottish Government this year took over the running of most train services in the country following the end of Abellio’s tenure in charge of ScotRail.

However, there has been no intimation that the Caledonian Sleeper could also end up in public hands.

Ms Gilruth said: “I can confirm that today Serco Caledonian Sleepers Limited has been advised that its proposal to rebase the franchise agreement with Scottish ministers for the provision of Caledonian Sleeper rail services has been rejected on the grounds of not representing value for money to the public.

“Additionally, I can confirm that a notice was served today which confirms that the Scottish ministers will terminate the franchise agreement with Serco Caledonian Sleepers Limited on June 25, 2023.

“Work is under way to determine arrangements for the continued provision of Caledonian Sleeper rail services beyond June 25, 2023 and this will be updated to Parliament once determined.

“It is worth noting that Serco Caledonian Sleepers Limited has, broadly, delivered well and significantly improved Caledonian Sleeper services over the last seven years.”