Image copyright South West Trains Image caption The South Western franchise covers long distance and suburban routes

Two train companies have been shortlisted for the South Western franchise, the government has revealed.

FirstGroup and Stagecoach both submitted expressions of interest to the Department for Transport.

South West Trains, run by Stagecoach, currently operates routes between London Waterloo, Reading, Bristol, Exeter, Weymouth, and Portsmouth, as well as Island Line.

The new operator is due to take over the franchise in June 2017.

South West Trains is the country's most profitable train operator with income of £1bn a year giving the Treasury receipts of £374m last year.

It has held the franchise since privatisation 20 years ago.

FirstGroup currently operates the Great Western Railway and First TransPennine Express networks.

Rail Minister Claire Perry said bidders would need to demonstrate how they will deliver better journeys for passengers.

"The South Western franchise has some of the busiest routes in the country, serving a diverse range of passengers and places."

She added there were "ambitious plans for smart ticketing, customer service and improved connectivity across the South Western network".