With Virgin as a partner, Stagecoach was awarded the east coast main line franchise in 2014

The government took an ideological decision to bail out Stagecoach on the east coast main line railway rather than allow the franchise to transfer to public hands, a former transport secretary has argued.

Lord Adonis said that he was “very concerned” at last week’s move by Chris Grayling, the transport secretary, to end Stagecoach’s contract up to four years early, potentially costing the taxpayer almost £2 billion.

Stagecoach, along with its 10 per cent partner Virgin Rail, signed up in November 2014 to run the London to Edinburgh routes until 2023, undertaking to pay £3.3 billion to the taxpayer out of its profits to operate the service.

However, it swiftly became clear that the routes would be less profitable than the pair envisaged and after