A POWERFUL Commons Committee is to investigate into the Transport Secretary over his decision to let two rail firms off a £1.5 billion bill.

The head of the Public Accounts Committee (PAC) said she feared taxpayers will be forced to carry the can because of a shake-up slipped out by the Department of Transport a fortnight ago.

3 The Transport Secretary will be investigated by a powerful Commons Committee for his overhaul of the £1.5billion bill Credit: Alamy Live News

Transport Secretary Chris Grayling is allowing Stagecoach and Virgin to hand back the troubled East Coast Mainline rail franchise three years early in 2020.

This means the pair can escape an estimated £1.5 billion in guaranteed premium payments to the Treasury.

Government insiders insist they hope a new contract for the line will recoup at least some of the money.

But speaking last night PAC chair, Labour’s Meg Hillier said: “Myself and Lilian Greenwood, head of the Transport Select Committee are very concerned about this and will be looking into it in the New Year.

3 Chris Grayling is allowing Virgin and Stagecoach to handback troubled East Coast Mainline despite fears taxpayers will have to covetr the costs Credit: EPA

“We believe there could be larger problems here. The key thing for me is to make sure taxpayers are protected, and I’m worried they are not.”

The move follows days of behind the scenes campaigning by Labour peer and former Transport Minister Lord Adonis – now the Government appointed head of the National Infrastructure Commission.

He was expected to write to the PAC to demand an investigation early this week. He told the Sun: “This has to be investigated, this could be costing taxpayers hundreds of millions of pounds while saving private firms a fortune.”

Stagecoach shares leapt by nearly 13 per cent on the stock market the day the Department for Transport announced the East Coast change a fortnight ago. Investors said it boosted the company’s profit hopes and chance of a bumper dividend for shareholders.

3 Labour’s Meg Hillier said she is concerned over Chris Grayling's decision to let off rail firms with a huge bill Credit: PA Archive

Earlier this summer Stagecoach said it had overpaid for the rights to run the East Coast Mainline when it bid £3.3 billion for an eight year deal.

most read in politics EAT IN OR TAKE OUT? Chaos & confusion over whether cafes will HAVE to offer table service Latest DOWN TO BUSINESS Chancellor to launch 'furlough replacement' tomorrow as Budget CANCELLED WINTER COMING England may have to ban home visits too as SAGE adviser warns lockdown coming Exclusive RISHI BLOWS THE BUDGET Chancellor to extend furlough for staff worst hit by new covid rules LOCKED UP AGAIN New lockdown rules explained: Everything you can and can't do now HOL ON A MO Downing Street warns families of risk of booking half-term holidays

Transport operators guarantee a set price to win a franchise in the hope they can then recoup the cash.

DfT permanent secretary Bernadette Kelly last week urged critics to recognise East Coast was a franchise “in some financial difficulty”.

“We need to find a way forward which preserves services for passengers and which delivers a good deal both for those passengers and for taxpayers.”