West Coast mainline operator Virgin Trains has started court proceedings over the Government's decision to award a new 13-year West Coast franchise to transport company FirstGroup from December.
In a statement, Virgin said: "We have tried for three weeks to get clarity over the DfT's decision and to have a number of key questions answered. On each occasion we have been refused information.
"We are left with no choice but to commence court proceedings as we believe the procurement process has ignored the substantial risks to taxpayers and customers of delivering FirstGroup's bid over the course of the franchise."
The Transport Secretary Justine Greening had been due to sign off the contract this week.
She said she was "disappointed but not surprised" by Virgin Train' action.
Virgin is now hoping that its legal challenge will delay the signing.
Virgin boss Sir Richard Branson has expressed concerns that FirstGroup would not be able to live up to its financial and service-providing targets for West Coast.
Today, in a statement, he said:
– Sir Richard Branson, Founder of Virgin Group
We had hoped that Parliament or an external review would be able to scrutinise this badly flawed process before the franchise was signed.
However that opportunity would be denied if the DfT follows through with its determination to rush through the process before Parliament returns next week.
That ignores the wishes of more than 150,000 people who signed the Downing St e-petition in 10 days, the Labour Opposition, two important Commons committees and many backbench Conservative MPs who wanted a debate before the decision is taken, not a post-mortem afterwards.
We have not taken this decision lightly, but it is the only course now available to try to unravel this sorry process
Responding to news of the legal challenge, FirstGroup said in a statement:
We have every confidence in the DfT’s process which is rigorous, detailed and fair and in which bids are thoroughly tested. There has been no complaint about the process, which was carefully described in advance, until Virgin Rail Group had lost commercially.
Our focus is to ensure a smooth transition with continuity for staff and passengers alike. We want to get on with delivering the many benefits and improvements we are offering without delay or disruption.
We will continue to prepare for a successful start up of the new franchise on 9 December 2012.
Earlier today, Justine Greening told BBC Breakfast that the West Coast Mainline contract will go ahead to take the franchise from Virgin Trains and award it to FirstGroup.
Labour has urged the Government to put the decision on hold until Parliament returns next week so MPs have the chance to fully scrutinise the deal.