The Department for Transport (DfT) has awarded the contract to operate the West Coast Main Line rail franchise to a partnership between FirstGroup and Italian firm Trenitalia.

First Trenitalia will take over the franchise from Virgin Trains, which was barred from submitting a bid to keep the route, in December this year until 2031.

New transport secretary Grant Shapps and Keith Williams, who is chair of the Rail Review, said the partnership will “deliver the swift introduction of significant benefits for passengers”.

According to the DfT, the new contract is “designed to fit with the direction of the Review and to facilitate the implementation of Williams’ recommendations in due course”.

The announcement comes just days after the DfT said it will delay the bidding process for the South Eastern franchise to give the government time to consider recommendations made by Williams in his final report, due to be published this autumn.

Aberdeen-based FirstGroup operates Greyhound buses in the US, though it is looking to sell this business. It is also considering spinning off its UK bus division First Bus, according to the BBC.

The group’s rail division also operates the South Western Railway and TransPennine Express.

The West Coast franchise will operate in two phases, with the first including existing InterCity services from 8 December until March 2026. The second phase will run from March 2026 to March 2031, when it will operate the HS2 high-speed rail service.

The DfT also said the deal “reflects a significant move away from the previous, flawed franchising system”, as the route will use a forecast revenue mechanism (FRM) “to avoid a repeat of the issues that affected the previous East Coast Main Line”. The department was referring to former transport secretary Chris Grayling’s decision to allow Virgin to end its contract on the East Coast franchise early because the company claimed continuing operations would place a financial burden on it.

But according to the BBC, the West Cost decision has prompted the Labour party to renew its call to nationalise the UK’s railways, with shadow transport secretary Andy McDonald saying awarding the “complex contract” to “a company with questions over its finances is a gross error of judgement”.

Commenting on the new franchise, Shapps said: “This award is positive news for passengers, with more services, more direct connections and ambitious plans for a cleaner, greener railway, and also represents a decisive shift towards a new model for rail.

“It is a partnership supported by Keith Williams, built with the flexibility to respond to his recommendations and deliver fundamental reform to a flawed system. Meeting Keith last week confirmed our shared determination to deliver a future that puts passengers at the heart of the railways, and get our trains to run on time.

“That is why I have asked Keith to produce his recommendations for a white paper, with fearless proposals that will deliver a railway system fit for the 21st century.”

First Trenitalia said it will offer more than 260 extra services per week by 2022, increasing seat miles by more than 10 per cent compared with 2017/18. It will also offer new, direct services to destinations including Liverpool South Parkway, Walsall and Gobowen and will offer more steps at stations such as Rugby, Llandudno Junction and Motherwell.

The group is set to invest in its stations to provide better accessibility and improved facilities, including more car park spaces. It claims it will reduce the environmental impact of its buildings by improving energy efficiency and installing solar panels, along with a commitment to cut non-recyclable waste from products sold or supplied on-board trains by 80 per cent.

In addition, First Trenitalia claims it will replace the diesel-only Voyager trains and reduce CO2 emissions by 61 per cent. It is due to introduce 13 lower-emission bi-mode trains for services between North Wales and London and ten electric trains that will operate two services per hour between Liverpool and London on weekdays and Saturdays.

FirstGroup CEO Matthew Gregory said: “The West Coast partnership includes operation of one of the most consistently successful intercity mainline franchises over the last 20 years. We are committed to delivering a range of improvements for intercity West Coast passengers during the first phase of the partnership and our aim is to provide exceptional service as standard for our customers.

“In 2016, we and our partner Trenitalia committed to bidding for the West Coast partnership as it is a unique opportunity to help shape and then run HS2. We look forward to playing our part in the success of the once-in-a-generation project to bring Britain’s largest cities closer together.”

Virgin Trains said it will work with First Trenitalia to “ensure a seamless handover for customers, who should still book and travel as normal”. The company has previously said it intends to request permission to launch a rival service on the Liverpool-London route from May 2021.