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.