ScotRail faces "significant challenges" in hitting punctuality targets in two years time, a regulator-commissioned report says.

The train operator, run by Dutch transport firm Abellio is projecting that it will be 2021 before it reached a target annual average of 92.5 per cent of services running on time.

A review report says the strategy envisages some improvement in March.

But the report by consultancy firm Nichols commissioned by the regulator, the Office of Rail and Road, predicts ScotRail faces a "significant challenge" in raising its puncutality performance.

It comes ScotRail continues to come under fire for service cancellations, delays and overcrowding since the winter timetable was brought in on December 9.

Transport secretary Michael Matheson has warned Abellio it could be stripped of the franchise if its performance does not improve.

ScotRail had still February 19 to submit a plan to address falling performance levels which if unsuccessful could result in a breach of contract and lead to Abellio losing the ScotRail franchise early.

The train operator has apologised to customers and says its staff are working "flat out" to make the service better.

The most recent problems have been mainly blamed on training issues with new trains, while strikes, and dealing with train faults have also impacted.

Abellio is expected to hit a target of 92.5% of trains arriving at their final destination within five minutes of the advertised time, according to the terms of the ScotRail franchise.

Nichols, which was asked by ORR to judge how well ScotRail was complying with a 2017 review by Nick Donovan on how the train operator is performing, praised a ‘can do’, collaborative approach to performance improvement and evidence of innovation.

But it concluded: "Despite the evidence of significant activity in regard to the implementation of the recommendations since the publication of the Donovan Report, there has been a further decline in performance and this raises questions about when the positive effects from implementation of the recommendations will materialise....".