The Government has cancelled the controversial franchise award of the West Coast mainline rail route to First Group after admitting it made serious errors during the selection process.

The mistakes emerged as Whitehall officials prepared to defend a legal case brought by Virgin – which was out-bid by First Group for the rights to offer the services from London to Glasgow and Manchester including Macclesfield, for the next 13 years.

The competitive process will now be re-run and all previous bidders will have their costs re-reimbursed, a bill that is likely to cost the taxpayer