VIRGIN Trains boss Sir Richard Branson indicated yesterday he would no longer bid to run services on the East Coast after losing the West Coast main line franchise to rival operator FirstGroup.

Virgin has run the London to Scotland West Coast, with its high-speed tilting Pendolino trains, since 1997, more than doubling annual passenger numbers.

But yesterday the Government announced that a new 13-year franchise for West Coast was being awarded to FirstGroup which already operates a number of other rail routes.

FirstGroup will pay £5.5bn back to the Government in premiums over the life of the franchise, with Rail Minister Theresa Villiers saying the new franchise would deliver “big improvements for passengers with more seats and plans for more services”.

FirstGroup chief executive Tim O’Toole said his company would be making “significant improvements, including reduced journey times, and introducing new direct services”.

But Labour, transport unions and Sir Richard fear FirstGroup will be unable to meet its performance promises and financial commitments and that the award of the new franchise could result in service cuts, job losses and big fare rises.

Sir Richard said Virgin, believed to have bid around £4.8bn for the franchise, could not have offered more without cutting customer quality and raising fares “considerably”.

In a strongly-worded statement, Sir Richard added that he was “extremely disappointed” with the franchise decision made by the Department for Transport (DfT). He went on: “Based on the current flawed system, it is extremely unlikely that we would bid again for a franchise.”