Arriva Trains Northern was today hit with a £2 million for cancelling up to 1,000 services a week which left passengers facing travel misery.

The fine by the Strategic Rail Authority is the largest single penalty imposed on a train operator for its poor performance - and comes on the day Arriva announced a new temporary timetable starting on Monday with services slashed across the board.

The company is replacing dozens of services with buses and slashing its timetable while advising passengers to use alternative trains on affected services.

The cuts of up to 1,000 services are set to last until next February.

The penalty comes on top of £9 million worth of fines the SRA imposed in the year ending last March for letting passengers down.

The SRA has also warned Arriva if it doesn't pull up its socks it could be stripped of its franchise altogether.

And it has been ordered to speed up its recruitment campaign for drivers and hit agreed targets - with driver shortages blamed by the firm as the main cause of the crisis - or face a further fine of £5,000 per driver per month if it misses its goal.

It has also been ordered to pump in a hefty £250,000 per month during the period of the temporary timetable to compensate passengers.

Managing director of Arriva Trains Ewan Cameron said: "Despite the excellent co-operation form our staff, the national shortage of drivers has created more acute problems in our business compared with others because of the shortage of drivers when we acquired it."

He said the company had recruited a 170 drivers since the beginning of the year and a further 150 are set to undergo training.

Today Arriva said it had avoided hitting peak hour morning services with the changes focused on afternoon and weekend journeys - particularly on the Wharfedale line.

But the company claimed most of its services across the north will be running as normal and has been given 26 days to respond to the fine.

SRA chief executive Mike Grant said the level of cancellations during the period May to September was unacceptable.

The company has been told it has until November 19 to convince the SRA that it is providing a proper service but faces the possibility of its franchise being stripped if it does not comply.

The revisions announced by the company today follow negotiations with West Yorkshire Passenger Transport Authority after a summer of chaos for passengers when trains did not turn up.

Bradford spokesman at the Passenger Transport Authority, Councillor John Prestage, said: "It is still bad. They have tried not to do any during the peak hours but business, shopping and tourism will be affected."

He said cuts to weekend services would also increase traffic on the already snarled up roads.

He added: "It is up to them now to keep to these new temporary time tables. We can't carry on having cancellations all the time. It's just not on."

Councillor Mick Lyons, chairman of West Yorkshire Passenger Authority and Metro said: "Ad-hoc cancellations cause by driver shortages at Arriva Trains Northern has brought about misery for rail passengers and could not be allowed to continue.

"With trains simply failing to turn up at stations, passengers couldn't plan journeys or have any confidence in services, which is why we have reluctantly agreed to this revised time table."

MetroTrain time tables and station posters for the affected routes are being reprinted, and Arriva Trains Northern has produced a special booklet available from any station with staff.

But today Bradford Council's executive committee member for the environment Councillor Anne Hawkesworth said the proposals made Ilkley a "no go" area, just as it was trying to build up tourism following the foot and mouth crisis.

Letters from Councillor Lyons, explaining the situation are being distributed to rail passengers across West Yorkshire.

Full details of the changes