Speaking to Sky News Education Secretary Michael Gove has confirmed that George Osborne paid for his upgrade to first class on a train journey to London which he boarded with a standard class ticket with his own money.
Virgin trains have said that the cost of the upgrade for the Chancellor was £189.50.
When asked about the incident of George Osborne apparently being caught with the wrong ticket on a train to London, Ed Miliband said, "it's part of a pattern of events with this government, they seem totally out of touch with most people.
"The incident with the Chancellor of the Exchequer on the train is just the latest example, along with Andrew Mitchell, along with cutting taxes for millionaires is a government that is out of touch and standing up for the wrong people."
- The Telegraph uses the 'Great Train Snobbery' headline with a picture of Mr Osborne in his first-class seat above the caption 'Not for moving'.
- The Sun's front page promises 'Two 1st class Tory c**k-ups' and carries a picture of the smiling ticket collector John McGann.
- The Independent also pairs the story with Andrew Mitchell's decision to quit, using the headline 'Mitchell quits at last – but then Osborne makes a first class howler'.
- The Financial Times reports on speculation that Mr Mitchell's resignation may have been timed to knock the Osborne affair off today's front pages.
ITV Granada correspondent Rachel Townsend was on the same train as George Osborne when she overheard his aide tell the ticket inspector that the Chancellor was sat in first class with a standard class ticket, but would prefer not to pay for the upgrade.
Watch Rachel Townsend's video account of the incident on ITV Granada.
A Twitter user posted a message five months ago claiming they were on the same train as George Osborne when the Chancellor was involved in a similar incident over first and standard class tickets.
Ticket inspector on my train just got a high five: george osborne tried to sit in 1st class with a std tkt. Inspector said NOFrom @Larrylarrylal on Twitter:
A Virgin Trains spokesman said:
Rt Hon George Osborne, Chancellor, was travelling on Virgin Trains' 15.11 Wilmslow to London Euston service this afternoon (October 19).
The Chancellor, who was travelling in first class accommodation, held a standard class ticket. As soon as the train left Wilmslow, an aide went to find the train manager to explain the situation and arrange to pay for an upgrade.
It was agreed that the Chancellor would remain in first class and an amount of £189.50 was paid by the aide to cover the upgrade for Mr Osborne and his PA.
The situation was dealt with amicably between the train manager and George Osborne's aide. At no time was there a disagreement or a refusal to pay for the upgrade. Nor was there any discussion between the train manager and Mr Osborne.
The Treasury has told ITV News the Chancellor had a diary change and he and his aide got a different train. They say that their existing seat reservations did not apply.
The train was crowded so they decided to upgrade from standard class to first class and they always intended to pay the difference.
It says the Chancellor is not aware of any row with a ticket officer.
Bob Crow, leader of the RMT rail union, said:
"This says it all about this rotten Government. Here we have a millionaire Chancellor who thinks he's above the normal rules and laws. George Osborne attempting to bunk first class is this ConDem administration in a nutshell."