LOSS-MAKING Connex South Eastern, the passenger rail company, was today given a £58 million Government bail-out and had its franchise period reduced by five years.

The money for the company has come from the Strategic Rail Authority (SRA).

Connex, whose franchise will now run out at the end of 2006 rather than in 2011, will add £11 million of its own equity to the SRA subsidy.

Connex is said to be making enormous losses and executives now say they cannot continue to operate while losing so much money.

Nick Newton, the SRA's chief operating officer, said: "This package has short and long term benefits for passengers.

"It secures the continuation of Connex's efforts to improve punctuality, ensures delivery of the programme to replace slam door trains, and opens the way for an expanded Kent franchise from 2007 incorporating the proposed high speed services."