UNIONS have reacted with fury after revelations that a company registered in the Cayman Islands tax haven is to run some of Britain’s privatised rail services.

Arriva runs CrossCountry, Chiltern, Grand Central and London Overground rail services.

Arriva’s owner, Germany’s state-owned rail operator Deutsche Bahn, recently sold Arriva for €1.6bn (£1.39) to I Squared Capital, which is registered in the Cayman Islands.

But rail unions have warned that I Squared Capital has no experience of operating rail services.

Arriva, which has received millions of pounds in taxpayer subsidies for running some of Britain’s most unreliable rail services, has paid out £340 million in dividends since 2010.

RMT rail union general secretary Mick Lynch said: “This sale of Arriva by the German state railway to a tax haven registered company underscores what a perverse and corrupt system rail privatisation is in this country.

“Our members have not had a pay rise in over three years despite huge profits and dividends generated for shareholders.

“And now we have the prospect of these ill-gotten gains ending up in a tax haven where there is even less scrutiny and even more wealth to be extracted from our railways.

“The public, through subsidies, is helping to fund privatisation and potentially the closure of 1,000 ticket offices across the network, going against the best interests of the travelling public and railway workers.

“It is vital to end the racket of privatisation and put the railways into public ownership as a matter of urgency.”

Maryam Eslamdoust, general secretary of managerial and technical union TSSA, said: “To say the least it is very troubling to see Arriva Rail sold off in this way to a company with no knowledge or any background at all in the rail industry.”

She said the deal “is yet another reminder of the fractured nature of our rail network” and called for rail to be taken back into public ownership.

It came as the Department for Transport (DfT) has announced that Avanti West Coast and CrossCountry, owned by Arriva, will continue to run services.

Labour said passengers will be “appalled” that long-term contracts have been handed to two of Britain’s least punctual train operators.

Shadow transport secretary Louise Haigh said: “The only reliable thing about Britain’s railways under the Tories is the waste of taxpayers’ money which the government has put into the pockets of shareholders.”