GNER has confirmed that it has handed back about £33m to the Strategic Rail Authority (SRA) under the terms of its franchise agreement.

The East Coast Mainline operator is among six rail companies paying the SRA for the privilege of running its franchises.

GNER, which this week agreed a two-year extension to its contract to operate trains on the route, was at the start of its franchise in 1996 receiving an annual Government subsidy. However, this has been gradually reduced and it is now subsidy-free.

The money returned as a result of profits made by GNER will be invested back into the rail industry.

GNER spokesman David Mallender said: "It is good news for passengers and tax- payers that we are now making a contribution, rather than taking a subsidy."

Included in the terms of the new franchise extension was a "benefits share" of any excess profits.

Gavin Bostock, a spokes-man for the SRA, said it could not say how much of the GNER cash would go towards improvements on the East Coast Mainline.

Tens of millions of pounds have already been committed towards the development costs of the project to upgrade the line.