UK transport minister Theresa Villiers has been forced to postpone the signing of a new franchise agreement on the West Coast Mainline following a legal challenge from Virgin Trains.
The department for transport had announced it intended to award the InterCity West Coast franchise to First West Coast, a subsidiary of First Group, on August 15th.
However, the controversial move was challenged in the courts by current operator Virgin.
The Labour party had also urged the coalition to delay the signing in order to allow MPs a chance to examine the deal.
The new franchise is planned to begin operation on December 9th 2012.
The franchise will operate for a core term of 13 years and four months, with an option to be extended to operate for up to 15 years.
The West Coast Main Line is one of the most important intercity rail passenger routes in the UK.
Over the last decade and more, taxpayers have invested £9 billion to upgrade the infrastructure.
When a new franchise begins, employees of the current franchise operator, including drivers, guards and back office staff will be transferred to the new operator, protected by TUPE regulations.
All of the rolling stock used by the incumbent operator will also transfer across.
“As a result of a legal challenge, which the government intends to defend robustly, we have not yet signed the contract with First West Coast, and consequently the competition remains live,” explained Villiers.
“I cannot give the full commercial details of the winning bid, or indeed of the other bids.
“Nor is it usual or appropriate - once litigation proceedings have commenced - for the government to comment on the detail of that, other than to say that our legal advisers are fully engaged in addressing and responding to those proceedings.”