The Department for Transport (DfT), with Justine Greening as transport secretary, announced in August that it had awarded a new 13-year franchise for the West Coast line not to Sir Richard Branson's rail company Virgin Trains but to rival transport company FirstGroup.
But at the beginning of this month, Mr McLoughlin, who took over from Ms Greening in the early autumn Government reshuffle, pulled the plug on the West Coast bidding.
He laid the blame "fairly and squarely" on the DfT officials. Three DfT civil servants have been suspended.
The faults with the process were discovered as the DfT prepared to defend a legal challenge to the West Coast decision brought by Sir Richard who labelled the bidding process "insane".
A Government minister and his department boss will face a grilling from MPs today over the West Coast rail franchise fiasco.
Members of the House of Commons Transport Committee will be armed with a damning initial report into what Labour has described as a "shambles" of a bidding process.
Transport Secretary Patrick McLoughlin and Department for Transport (DfT) permanent secretary Philip Rutnam will have to explain why the DfT went ahead with the West Coast bidding competition knowing the process was flawed.
Mr McLoughlin will also be asked why he told MPs on his first appearance before the committee in September that he was happy with the bidding process only for him to scrap the entire West Coast refranchising process a few weeks later.
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Richard Branson has tweeted that he is considering buying back the music label he founded, Virgin Records.
Current owner Universal Music may have to sell the company as it looks to buy rival EMI.
Branson founded Virgin Records in 1970 aged just 20, selling it to Thorn EMI in 1992 for £510 million.
Virgin boss, Sir Richard Branson, has become the oldest person to kitesurf across the English Channel. He arrived in France a short time ago. More details to follow on ITV Meridian.
Virgin boss Richard Branson told ITV News that he "would urgently like to see the Government allow a third runway at Heathrow" and not having one "is holding the country back enormously" in terms of infrastructure.
He added that "it wouldn't cost the country any money at all to see that investment made but it would pay back many many times over".
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Speaking to ITV's Daybreak correspondent, Nick Dixon, Claire Lomas says the support has been "overwhelming." Tweeted by celebrities such as Richard Branson, Piers Morgan and Gordon Ramsey, Claire says it's an experience she will "remember for the rest of her life."
Virgin Atlantic has come up with a novel innovation for its in-flight refreshments. Passengers can cool their drinks down with an ice-cube in the shape of Sir Richard Branson's face. Four designers spent more than a month moulding the cubes into an icy replica of the company's boss.