Train operator London Mildand, which has been forced to cancel hundreds of services through the West Midlands due to a shortage of crew, could face action from the Department for Transport.
The disruption on London Midland services, which has angered passengers on routes linking Birmingham and the capital, has not yet resulted in a breach of the operator's obligations.
But Commons Leader Andrew Lansley warned the firm to improve "in short order" or face the threat of DfT sanctions.
Tory MP Mark Garnier (Wyre Forest) said questions had already been asked in the Commons about London Midland's "very, very poor" service. He added: "Despite this, their performance continues to be absolutely atrocious."
Mr Garnier called for Transport Secretary Patrick McLoughlin to make a Commons statement explaining how the "pitiful situation" could be resolved.
Mr Lansley said: "London Midland have been experiencing a high level of cancellations for about two months now. London Midland are not yet technically in breach of their obligations. But if improvement is not seen in very short order the Department for Transport will need to consider taking action against the train operator."
On Wednesday in the Lords it emerged the shortage of drivers was partly due to staff taking leave they were unable to take during the Olympics.
Government spokesman Earl Attlee said: "The problem is that the chickens are coming home to roost.
"During the Olympics period, leave was restricted but now the drivers want to have their leave.
"In addition we are experiencing problems with half-term when drivers naturally want to be at home with their families."