SPENDING watchdog the National Audit Office (NAO) is to investigate the Government’s handling of the £3.3bn East Coast Mainline franchise.

There has been much controversy over Transport Secretary Chris Grayling’s decision last year to cut short the contract given to Stagecoach and Virgin with critics claiming it will leave the public out of pocket.

A new public/private East Coast Partnership will take over the running route of the route in 2020.

Shadow transport minister and Middlesbrough MP Andy McDonald said Mr Grayling had gone to “great lengths to avoid answering questions on this colossal waste of taxpayers’ cash”.

He said: “It is absolutely right that the National Audit Office will investigate the decision.”

A spokesman from the Department for Transport said: “The Government has been very clear - no one is getting a bailout and Virgin Stagecoach will continue to meet its financial commitments made to the taxpayer on the East Coast rail franchise, as it has done since 2015.

“Premium payments continue to flow to the taxpayer, as they currently do and any suggestion that the taxpayer will be out of pocket is completely wrong.”

The RMT rail union has repeatedly called for the line to be brought back into public ownership, as it was before Stagecoach/Virgin’s involvement.