In October the Government U-turned on the decision to award FirstGroup the West Coast Mainline, after finding "significant technical flaws" in the way the procurement was conducted.
Virgin are now running the service until November 2014, with the fiasco costing the taxpayer £43 million.
This episode revealed substantial problems of governance, assurance, policy and resources inside the Department for Transport.
Embarking on an ambitious, perhaps unachievable, reform of franchising, in haste, on the UK's most complex piece of railway was an irresponsible decision for which ministers were ultimately responsible. This was compounded by major failures by civil servants, some of whom misled ministers.
Many of the problems with the franchise competition, detailed in the Laidlaw report, reflect very badly on civil servants at the DfT. However, ministers approved a complex, perhaps unworkable, franchising policy at the same time as overseeing major cuts to the Department's resources. This was a recipe for failure which the DfT must learn from urgently.
In its report on the west coast mainline fiasco, the Transport Committee has said embarking on the reform of franchising on the UK's most complex piece of railway was "irresponsible" and needed greater senior executive involvement and more technical expertise.
"A more direct description of what happened is that ministers and senior officials were lied to about how the outcome of the franchise competition had been reached." said the MPs' report.
"We cannot categorically rule out the possibility that officials manipulated the outcome of the competition not only to keep First Group in the running for as long as possible, as Mr Laidlaw suggested, but to ensure that First got the contract."
A Government department was today slammed for being "irresponsible" over its role in the collapse of the £5 billion West Coast Mainline rail contract.
A committee of MPs said the Transport Department had embarked on an "ambitious, perhaps unachievable" reform in haste, and claimed that ministers and senior officials were lied to.
FirstGroup was told it had won its bid to take over the franchise from Virgin Trains, but the decision was scrapped after the discovery of "significant technical flaws" in the way the procurement was conducted.
Virgin has now been told it can run the service until November 2014, with the fiasco costing taxpayers over £40 million.
The mistakes came to light after bidder Virgin Trains, which had run the West Coast Mainline since 1997, launched a legal challenge against the decision.
A Government-commissioned report led by businessman Sam Laidlaw last month gave a damning indictment of how the competition was handled.
Three members of staff at the DfT were suspended over the episode.
There is currently a 20 minute delay on train services between Wolverhampton and Coventry.
CrossCountry and Virgin Trains are both being affected by an issue caused by signalling problems at Birmingham International.
The train maker Bombardier has signed a contract with Virgin Trains to continue maintaining its Super Voyager fleet that operates on the UK's West Coast main line.
It's a deal that's worth £100m to the train manufacturer that has a factory in Derby.
They already service the trains for Virgin but this deal extends their contract to March 2016.
Bombardier will maintain the trains at its Central Rivers depot in Burton-on-Trent in Staffordshire 24 hours a day, 365 days a year. They employ 360 people there.
“Winning this contract allows us to continue our strong relationship with Virgin, which has been in place since 1998. It demonstrates Virgin’s trust in Bombardier to continue delivering an excellent and cost-effective service."
Paul Roberts, Chief Country Representative of Bombardier Transportation, UK.
The government's transport secretary has said that his department is taking "swift action" regarding the controversy surrounding the West Coast rail franchise.
Transport Secretary Patrick McLoughlin said:
"The NAO has made a number of recommendations that mirror many of the findings of the Laidlaw Inquiry in terms of the work we need to do to strengthen our organisation and the structures within it.
"We are already taking swift action on this front and I believe the plans we are putting in place to ensure future franchise competitions are conducted on the basis of sound planning, the rigorous identification and oversight of risk, will prevent a repeat of these lamentable failures."
The Transport Secretary Patrick McLoughlin has announced Virgin are to operate the West Coast Mainline until November 2014.
Virgin had been set to lose the West Coast contract which it has been operating since 1997 but the Government scrapped the bidding after faults by the Department for Transport were found with the bidding process.
The suspensions of three Department for Transport officials following the scrapping of the West Coast franchise bidding have been lifted, the department said.
Transport Secretary Patrick McLoughlin today announced the appointment of a Director-General with "responsibility for all rail policy and franchising."
"We will ensure that we have the right mix of professional skills inside the department and, where necessary, from professional external advisers," he added.
Mr McLoughlin made the announcement after confirming that Virgin Trains would continue to run the West Coast mainline until at least 2014.