Three companies have invited to submit detailed bids to run the East Coast franchise, which operates trains on the East Coast Mainline between London and Edinburgh.
Inter City Railways Limited (Stagecoach Transport Holdings Limited and Virgin Holdings Limited)
Keolis/Eurostar East Coast Limited (Keolis (UK) Limited and Eurostar International Limited)
East Coast Trains Ltd (First Group plc).
The franchise has been in government hands since November 2009, when National Express gave it up, saying it could not afford to run it any more. Government plans to re-privatise the service have been subject to protests from those who feel it would be better left in public ownership.
The successful bidder is expected to be announced in November. The new franchise will start in March 2015 and run for eight years with the possibility of a one-year extension.
The Government has published a shortlist of three bidders under plans to re-privatise the East Coast mainline - which runs through the North East - sparking a row over whether the rail franchise should remain publicly-run.
Some of the biggest transport firms which already run rail routes across the UK are on the list of preferred bidders for the 393-mile route from London to Edinburgh.
These include First Group, Stagecoach, Virgin, Keolis and Eurostar.
Unions and other groups have been campaigning for months to halt re-privatisation of the franchise, which has been publicly-run since 2009.
One union official accused the Government of 'economic vandalism'.
Rail Minister Stephen Hammond said: "Giving passengers more will be at the heart of the new East Coast franchise.
"That means new services and journeys that are faster, more punctual and more comfortable."