Image caption An ITV reporter took a picture of Mr Osborne on the Virgin train

The Chancellor George Osborne had to pay for an upgrade after he sat in a first class train carriage with a standard class ticket.

Early reports suggested an aide to Mr Osborne initially refused to pay a supplement, but Virgin Trains said there was no disagreement.

ITV reporter Rachel Townsend, who was on the same train as the chancellor, tweeted about the incident.

The chancellor did not comment when he arrived at Euston station.

A spokesman for Mr Osborne said: "The chancellor got a different train than planned due to diary change following a series of meetings in his constituency.

"As he had no seat reservation on the new train which was crowded, he decided to upgrade - and obviously intended and was happy to pay.

"An aide sought out the train manager and paid the ticket upgrade," the spokesman added.

The initial reports suggested the upgrade fee was £160, but Virgin Trains have since confirmed the actual figure was £189.50 and covered the cost of an upgrade for the chancellor and an assistant.

'Dealt with amicably'

A Virgin Trains spokesman said that the Chancellor's aide found the train manager as soon as the train left Wilmslow station near Manchester "to explain the situation and arrange to pay for an upgrade".

They added: "It was agreed that the Chancellor would remain in first class and an amount of £189.50 was paid by the aide to cover the upgrade for Mr Osborne and his PA.

At the scene The power of Twitter. Within minutes of a single ITV journalist tweeting about what she'd overheard on a train, the press pack was bound for Euston Station. Virgin Trains had confirmed what had happened, and collectively we'd worked out which train the Chancellor must be on. He'd be arriving at 1704. We were refused permission to film on the station concourse, and most of us were clueless as to where George Osborne would head once he had arrived. Cue lots of reporters and photographers dashing about with aimless ignorance. We chanced upon the goods entrance, the exit VIPs tend to use, apparently. We were too late. He'd left two minutes earlier, having got into a car opposite the Royal George pub. My tardiness aside, the episode is yet another example of the journalistic power of Twitter. "Good job, Twitter. From first to last a fabulous communal experience," said Patrick O'Flynn from the Daily Express. Where did he say that? On Twitter of course.

"The situation was dealt with amicably between the train manager and George Osborne's aide.

"At no time was there a disagreement or a refusal to pay for the upgrade. Nor was there any discussion between the train manager and Mr Osborne."

The story was broken via a series of tweets by ITV reporter Rachel Townsend, who works for Granada Reports in the North-West of England.

She said: "Very interesting train journey to Euston Chancellor George Osborne just got on at Wilmslow with a STANDARD ticket and he has sat in FIRST CLASS...

"His aide tells ticket collector he cannot possibly move and sit with the likes of us in standard class and requests he is allowed to remain in First Class.

"Ticket collector refuses... I am a carriage away from the action but have asked ticket inspector if he was going to let him stay "no chance"

"£160 for First Class upgrade... aide says no!..

"Breaking news: George Osborne pays £160 to stay in first class!"

Mr Osborne is understood not to have had any direct communication with Virgin Trains staff - and an officer from the Metropolitan Police, who was escorting the chancellor, is reported to have told the train manager in advance that Mr Osborne did not have the correct ticket.

'Out of touch'

A crowd of journalists and photographers, who have been following the story on Twitter, gathered at Euston in the hope of quizzing the chancellor about the incident.

Labour have been quick to seize on the row, with shadow cabinet officer minister Michael Dugher saying: "Another day, another demonstration of how out of touch this government is.

"Just like Andrew Mitchell, George Osborne obviously thinks it's one rule for him and another for the plebs he's so keen to sit apart from. So much for 'we're all in it together'."

On his website, Mr Osborne says he helped to save direct train services between London and Wilmslow, which he uses to commute from his Tatton constituency, in Cheshire.

On its website, Virgin Trains warns travellers they will be charged an excess or penalty fare if they board a train without a ticket or attempt to change from standard to first class without a first class ticket.

If you do not produce a valid ticket when asked, "you could be refused travel entirely or asked to leave a train or station before you have completed your journey," it adds.