ARRIVA has seen off Virgin Trains to be awarded the Cross Country rail franchise that operates across almost the entire length of Britain.

The North-East transport company was one of four names in the battle for the eight-year franchise, which it will take over on November 11.

News of the win lifted Sunderland-based Arriva's share price by almost ten per cent yesterday morning, and helped it to close up 7.92 per cent at 770p last night.

Covering 1,600 miles, the Cross Country franchise has been run by Virgin since January 1997 and stretches from Aberdeen in the north to Penzance in South-West England. It also includes the Nottingham to Cardiff and Birmingham to Stansted airport services run by Central Trains.

Arriva will receive a £1.05bn subsidy over the life of the franchise to April 2016 and said that annual revenue is expected to top £600m in its first full year.

The group yesterday promised increased capacity, better performance and improved customer services.

It said there would be a 35 per cent increase in seating capacity in evening peak periods on principal routes by June 2009 and nearly 20,000 extra seats through Birmingham every weekday.

Among other improvements would be additional late-evening services to and from Stansted Airport.

Rail minister Tom Harris said: "We have secured an excellent deal with Arriva. Not only are they delivering an even bigger increase in capacity than we asked for, they are doing it a year earlier than expected.

''I am especially pleased that the new franchisee will connect some of our biggest cities even more effectively. This will benefit both business and leisure travellers."

Two other major transport companies, First Group and National Express, competed with Virgin and Arriva for the new Cross Country franchise.

Virgin, which yesterday said it was "extremely disappointed" to have lost the franchise, still runs the main London to Scotland West Coast line as operator of the West Coast franchise.