New ruling throws into doubt the proposed acquisition of London & Continental Railways by Crossrail chairman Sir Adrian Montague.

London & Continental Railways, the owner of the Channel Tunnel Rail Link (CTRL) and the British half of Eurostar, has effectively been nationalised.

A ruling yesterday by the Office of National Statistics reclassified the firm as a public non-financial corporation, a similar status to the Royal Mail and London Underground.

The ruling throws into doubt the attempted acquisition of LCR by Sir Adrian Montague, the influential former PFI adviser and current chairman of Crossrail.

Montague, also a former deputy chairman of Network Rail, last week revealed that he had teamed up with investment bank Goldman Sachs to launch a bid for LCR.

Since yesterday's ruling, the government will now be able to decide whether to allow the sale of the firm, which has debt of £5.8bn, to go ahead or not.

The decision came after an ONS investigation found that a government guarantee of £3.7bn of LCR's debt gave ministers the power to take control of the business. They now have the right to force a sale of the business and hold on to 90% of the proceeds.

It also means that the government could claim 50% of any profit on the development of LCR's 120-acre land holding in Stratford, which includes Stratford City and part of the London 2012 Olympics site.