Virgin Rail has slammed the government’s decision to grant First Group the franchise to run trains on the West Coast mainline.

Stagecoach, which has run the service in a joint venture with Virgin since 1997, said it was “bitterly disappointed” with the decision.

FirstGroup, the UK’s largest rail operator, had been favourite to win the franchise from December for 14 years after offering the highest bid.

Stagecoach group chief executive Sir Brian Souter said: “I am bitterly disappointed that Virgin Rail Group has been unsuccessful in its bid for the new West Coast rail franchise.

“After 15 years, it is difficult to imagine a West Coast rail service without the Virgin brand.

“I would like to thank all those that have been involved in delivering the Virgin vision over that time and all those that contributed to the strong bid for the new franchise. The outcome is a blow to all of those people.”

Virgin group founder Sir Richard Branson also strongly criticised the decision.

Sir Richard said: “Based on the current flawed system, it is extremely unlikely that we would bid again for a franchise.

“The process is too costly and uncertain, with our latest bid costing £14 million.

“We have made realistic offers for the East Coast twice before which were rejected by the Department for Transport for completely unrealistic ones and therefore will have to think hard before embarking on another bid.”

First Group plans to introduce 11 new 125mph six-car electric trains on the Birmingham-Glasgow route and provide more direct services between destinations.

New services are planned from Blackpool, Telford, Shrewsbury and Bolton to London. First West Coast, as the new business will be called, aims to cut the cost of ‘Standard Anytime’ fares by an average of 15% within the first two years.

Rail minister Theresa Villiers said: “This new franchise will deliver big improvements for passengers, with more seats and plans for more services.

“Targets to meet on passenger satisfaction will be introduced for the first time in an InterCity rail franchise and passengers will also benefit from smart ticketing and from investment in stations.

“The West Coast is the first of the new longer franchises to be let by the Coalition which has helped us secure real benefits for passengers by encouraging First West Coast to invest in the future of the service.”

First Group Chief executive Tim O’Toole said: “Our bid also delivers value for taxpayers by returning premiums to the government underpinned by sustainable growth in passenger numbers and revenues from the utilisation of significant available capacity.”