Hands-on Stagecoach chief Souter grabs controls at South West Trains

Souter's move came as the Perth-based transport group yesterday revealed that Ian Dobbs, the 54-year-old chief executive of its rail division, will leave at the end of this month.

Stagecoach founder Souter will now directly oversee management of the South West Trains franchise out of London Waterloo through the Surrey stockbroker belt.

And Martin Griffiths, Stagecoach's finance director, will take responsibility for the East Midlands Trains franchise, the company's 49 per cent stake in the Virgin West Coast franchise between Glasgow and London, and the group's light rail operations.

The surprise changes come just two months after Stagecoach braced the City for a slowdown in earnings at the rail division this year.

Although the group's rail profits rose to 31.7m in the six months to end-October 2008, up from 25.3m a year earlier, the rising tide of redundancies in the south of England is expected to hit traffic.

Rail revenues in that six-month period jumped 50.7 per cent to 486.4m from 322.7m.

SWT carries 160 million passengers a year but is thought to be particularly vulnerable to the impact of recession on commuter rail travel.

The company announced 480 job cuts at SWT on 15 January and a further 180 on 4 February.

A spokesman for Stagecoach denied yesterday that Souter and Griffiths risked being overstretched by taking on their new roles.

He said: "Culturally Stagecoach has always had a short chain of command across all its businesses. Brian and Martin will also be working with high-calibre teams on the ground in these businesses."

Dobbs, who is below board level at the Scottish group, joined three and a half years ago. He was previously chief executive of the Victoria Public Transport Corporation.

Souter billed yesterday's changes as being part of "an extensive programme to reduce our costbase across all of our UK rail operations".

He thanked Dobbs for his "significant contribution", saying he had played an "important part" in the successful expansion of the group's rail activities.

Dobbs said he had found his time at Stagecoach "enormously satisfying", and that the company was "now a cornerstone of the UK's passenger rail industry".

No details were being given by the company about any payoff to Dobbs for loss of office. It is not known what salary he was on, because he was not at board level.

The news came as rail union RMT announced it would ballot 3,500 workers across three networks, including South West, for strike action after failing to get assurances from rail operators that there would be no forced job losses.

Stagecoach's shares closed down 4.7 per cent at 125.25p.