Virgin UK is set to lose its West Coast main line rail franchise – serving Manchester passengers on a daily basis – to rivals FirstGroup.
Sir Richard Branson’s train company has been beaten in the battle to run the London to Scotland line and the government is expected to announce the decision ending Virgin’s 15-year reign of the service.
FirstGroup, which operates a number of routes including Great Western and ScotRail, is believed to have offered up to £7billion to control the route for the next 14 years, staring in December.
The news will cause uproar within Virgin Rail – which is majority-owned by Stagecoach – as they count initiate a legal challenge as Labour and transport unions warn that increased fares and job cuts could occur in the changeover.
Rail Minister Theresa Villiers said: "Labour have admitted that their only transport policy is rail renationalisation with huge costs and massive upheaval for our railways."
She added: "We are currently evaluating bids for the Intercity West Coast franchise. All franchise bids are judged on their affordability, deliverability and their value for money for passengers and the taxpayer."
The West Coast line carries 31million passengers each and connects Birmingham, Liverpool, Manchester, London and Glasgow.
The West Coast carried around 13 million passengers a year in 1997. The annual total is now around 31 million.
RMT general secretary Bob Crow said: "Whoever wins the West Coast route, and all the signs point to FirstGroup, they should be left in no doubt that we will mount a massive industrial, political and public campaign to stop any attacks on our members' jobs and the services that they provide to the travelling public."
But the new First West Coast Limited company has promised to introduce 11 new six-car electrice trains that will increase the number of seats across the franchise and has planned new services to Blackpool, Telford, Shrewsbury and Bolton.
The company has also promised to reduce 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 Limited to invest in the future of the service.”
There will be an extra 12,000 seats a day from December 2016 and 106 additional Pendilino carriages, journeying up to 28,000 seats a day.