Originally Posted by Sky News

The decision to award the West Coast Main Line franchise to FirstGroup has been cancelled due to flaws in the way the process was conducted.

The decision was announced by Transport Secretary Patrick McLoughlin.

It means the Department for Transport (DfT) will no longer be awarding a franchise contract to run the West Coast service when the current franchise expires in December.

FirstGroup was due to take over the running of the London to Scotland line after being awarded the contract by the DfT in August, but Virgin Rail, which currently runs the service, launched a High Court challenge against the decision.

The DfT said it would be no longer contesting the judicial review sought by Sir Richard Branson's company.

Mr McLoughlin has also ordered two independent reviews into the competition process.

The flaws uncovered by the DfT relate to the way the procurement was conducted by department officials, it said.

It said the flaws stemmed from the way the level of risk in the bids was evaluated.

Originally Posted by Sir Richard Branson

"I took a call this evening in New York from the UK Secretary of State for Transport, Patrick McLoughlin, telling me that he will no longer be awarding the West Coast Main Line franchise to FirstGroup.

From the moment we found out that FirstGroup had been made the preferred bidder with a completely unrealistic bid, we questioned the way the offers had been assessed, and asked Government to review and explain how it came to its decision.

We were convinced the process was flawed but despite our best efforts we were met with silence by the Department for Transport. We also asked for government to appoint an independent advisor to look at the situation, which was turned down. Reluctantly we were forced to seek a judicial review. Tomorrow the DfT were meant to have given their evidence to the court.

I am pleased to say that the DfT has looked at all of the facts and found significant flaws in the way its officials handled the process. They have basically acknowledged that what we had been saying is correct. The same procedures were not followed and 'deeply regrettable and completely unacceptable mistakes' were made by the Department.'

At the House of Commons Select Committee we called for all franchise competitions to be paused and a thorough, independent review of the process. We are grateful that Patrick McLoughlin is now doing this.

We also appreciate the DfT publicly acknowledging these errors, and are hopeful they will now accept that Virgin Trains should carry on running the West Coast Main Line and ensure that passengers continue receiving our team's award-winning service.

Finally, I would like to thank our staff for their incredible work through unsettling times and to all our passengers who have been so supportive. I would particularly like to thank those who signed Ross McKillop's e-petition that resulted in the House of Commons debate, and all those who believed that we were right in thinking there was a case to answer."