Virgin Trains East Coast has said it will assist a public spending watchdog’s investigation into the Government’s decision to allow it to cut short the East Coast mainline contract by three years.

The National Audit Office said it would scrutinise the Department for Transport’s decision to allow Virgin Trains East Coast (VTEC) to hand back the keys to the franchise by 2020 rather than 2023, as originally agreed.

The company, a joint venture between Stagecoach and Virgin Trains, has publicly blamed delays to infrastructure projects on the line from London King’s Cross to the North-East and Scotland for wanting to quit the franchise. It has said the delay to schemes means it cannot expect to meet the requirements set out for it by the Government.

The Transport Secretary Chris Grayling told the transport committee earlier this month that the company had overbid for the contract, meaning it had not been hitting its expected revenue targets.