Image copyright Getty Images Image caption The franchise will run from August for seven years

A Hong Kong-based firm is to help run one of the biggest rail franchises in the UK, the government has announced.

MTR, which operates the Hong Kong Metro, has been awarded the franchise along with First Group to run South West Trains (SWT) for seven years.

Rail union RMT has reacted angrily saying MTR, which will hold a 30% share, "is set to make a killing at the British taxpayer's expense".

Stagecoach currently runs SWT services across south west England.

The firm said it had "submitted a strong bid" but was disappointed to be losing the franchise, which it has operated for two decades.

Image copyright Getty Images Image caption MTR runs the Hong Kong Metro service

The Department for Transport (DfT) said the new operators would oversee a £1.2bn investment to improve journeys for millions of train passengers.

It said the new franchise would add 22,000 extra seats into London Waterloo on every morning peak and 30,000 extra seats each evening peak.

A fleet of 90 new trains has also been promised, providing more space for passengers on Reading, Windsor and London routes.

Transport Secretary Chris Grayling said the deal "marks a new era in joined up working between train operators and Network Rail".

But Mick Cash, RMT General Secretary, said the government had "refused to consider the public sector option for a major rail franchise".

"RMT is deeply concerned at exactly what this announcement will mean for our members, these crucial rail services and the safety of the travelling public," he added.

Improvements promised under the new contract:

Refurbished trains

Journeys to London eight minutes faster from Southampton, 14 minutes faster from Weymouth, nine minutes faster from Bournemouth and 10 minutes faster from Exeter

Free Wi-Fi at all stations and on mainland trains

29 additional weekday and Saturday services between Portsmouth & Southsea and Southampton Central

35 additional weekday and Saturday services between Portsmouth & Southsea and London Waterloo

More Sunday services

Investment in stations, including improvements to Southampton station

Live information on seating availability and crowding levels via a new mobile phone app

Mixed reaction

The news has prompted a mixed reaction among commuters and social media users.

Matt Rowley tweeted: "If Hong Kong is anything to go by #MTR is a great choice. The cleanest, most reliable & best value service I've ever seen."

Another Twitter user, Gareth Reynolds, said: "If you've ever been on the HK underground, you'll know this is fantastic news!"

Image copyright Twitter

Suzi Millar said on Twitter: "Yay! Goodbye (fingers crossed) awful service. Goodbye #southwesttrains."

However Stephen Day said he was "shocked" by the news Stagecoach had lost the franchise. "Over the years the service has been transformed and staff really first rate," he tweeted.

Junior Henry tweeted: "Been using trains for yrs. This, perfect example of "trying to fix what isn't broken". Sad!"

Stuart Barber took to Twitter to say it was "another rail contract to an non U.K. Company".

Analysis: Paul Clifton, BBC South transport correspondent

Image copyright PA

South West Trains is the only franchise to have remained in the same hands since privatisation 21 years ago. It is the flagship of the Stagecoach Group.

In August it will change hands, right in the middle of a massive rebuilding of Waterloo - by far the busiest station in Britain. The timing is awkward.

In come First Group, the operator of Great Western, in partnership with Hong Kong-owned MTR, which will also run Crossrail trains.

This really will be a changing of the guard at Britain's second biggest franchise, for which bidders were also required to submit options for driver-only operation.

Stagecoach's chief executive Martin Griffiths said: "We are proud to have operated the network under the South West Trains brand for more than 20 years and we are disappointed that we have been unsuccessful in our bid for the new franchise."

Independent watchdog Transport Focus said SWT passengers had told them they wanted more reliability, more space to sit and stand and modernised stations.

FirstGroup chief executive Tim O'Toole said they were "delighted" their partnership with MTR had been chosen by the DfT, and promised "tangible improvements" to the franchise.

'Ambitious proposals'

"Passengers can look forward to new and better trains, more seats and services, quicker journey times, improved stations and more flexible fare options," he said.

Jeremy Long, from MTR, said: "Together we will deliver a major programme of upgrades, including improvements to both rail services and customer experience, for passengers travelling across the South Western network."

Transport Focus said it was "looking closely" at the winning bid to see how the "ambitious proposals will deliver for passengers".

Chief executive Anthony Smith said the enhancements must be delivered "in a way that does not cause undue shorter term disruption".