The Prime Minister defended her Cabinet ally after Halifax MP Holly Lynch quoted this newspaper's report that Mr Grayling in May 2017 said his department would "endeavour to keep our promises" on electrification of the Midland Mainline, despite a National Audit Office report now suggesting he must have known it would be cancelled two months beforehand.
Ms Lynch also highlighted delays, overcrowding, record ticket prices and problems with disabled access as she called on Mrs May to give the North a rail service "truly capable of delivering the Northern Powerhouse".
An angry PM hit back, insisting Ministers recognise the importance of infrastructure investment in the North.
At Prime Minister's Question's, Labour MP Ms Lynch said "The Yorkshire Post has this weekend taken the unprecedented step of calling on the Secretary of State for Transport to resign, accusing him of repeatedly betraying our region over rail.
"Electrification is nowhere to be seen, trains are routinely overcrowded and delayed, and wheelchair users are left stranded when access links are broken or locked - all set against record ticket prices.
"Can the Prime Minister explain to passengers in Yorkshire when they will see a rail service which is truly capable of delivering the Northern Powerhouse?"
Mrs May replied: "We are putting record investmennt into rail across this country, and that includes investment in rail in the North.
"And we are supporting Transport for the North which is coming forward with its proposals for the North.
"This is a Government which recognises not just the importance of infrastructure, but the importance of infrastructure across the whole of this country."