THE RMT rail union says privatising the East Coast rail line was a “reckless gamble” after it uncovered the extent of the annual cost to the new operator.

It said Inter City Railways, a venture between Stagecoach and Virgin, had agreed to pay £210m to the Government in its first year of operation.

That figure would then rise by nearly 200 per cent to £623m in the seventh year of the franchise contract, which the union said sounded alarm bells.

Previously it had been revealed that £3.3bn in total was being paid by Inter City Railways, which has pledged £140m in improvements to the service.

Inter City Railways – which is branded as Virgin East Coast – replaced publicly-run Directly Operated Railways which had operated the route since 2009 after National Express walked away from its £1.4bn contract because it could not meet its financial commitments.

The figures were revealed as a result of questions by RMT Parliamentary Group Convenor and Labour MP John McDonnell.

The RMT said the “eye watering” returns set out in the franchise profile could only be achieved by jacking up fares, or cutting jobs and pay, or with an increased tax payer subsidy – effectively meaning the line would operate at a loss.

Its General Secretary Mick Cash said: “Serious questions need to be asked about the financial profiling on the new East Coast franchise which have the same ring as the wild projections that led to the eventual collapse of National Express on the same route.

“The re-privatisation of the East Coast was always going to be a reckless gamble – smashing up a public sector operation handing over a billion pounds back to the taxpayer in favour of a whole stack of promises from a third bunch of private speculators.”

Darlington Council leader Bill Dixon, who is lead member for the East Coast Consortium, consisting of representatives from local councils, said: “My view on East Coast has always been ‘If it ain’t broke don’t fix it’.

“In their haste to privatise the line the [Government] are in danger of bankrupting private companies and then leaving the public sector to bail them out.”

A spokesman for the Department for Transport said: “The Department awarded this contract because it is both deliverable and sustainable and represents the best deal for passengers and taxpayers.

“The Virgin Trains East Coast premium payments are based on sound analysis, which has been robustly tested to ensure that taxpayers’ interests are protected.”