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.
An MP has told ITV Central that at least one of the three civil servants who were suspended over the West Coast trains bid also worked on the bid which Derby train maker Bombardier lost.
The allegations were made in a rail magazine but tonight the Department for Transport was unable to confirm or deny this categorically.
A rail magazine has reported that two of the three people suspended over the West Coast bid also worked on the Bombardier bid.Read the full story ›
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Virgin Trains are offering compensation to passengers affected by the problems caused by broken overhead power cables in Watford last night.
There were long delays for people travelling to the West Midlands after the power lines came down on the route into and out of London.