THE Department for Transport (DfT) has rejected suggestions that Virgin could be handed the keys to the East Coast Main Line franchise after it lost its Cross Country route to rival Arriva.

Virgin had operated Cross Country services since 1997, but was stripped of the contract on Tuesday, which instead was awarded to Sunderland-based Arriva.

There has been speculation that Sir Richard Branson's company could now be in pole position to win the East Coast franchise soon to be vacated by existing operator GNER.

Last night, a DfT spokesman said: "This is not about shuffling the deckchairs round. All the franchises are dealt with separately and we will be picking the best bid for East Coast from the shortlist we have.

"It is not down to who the company is or who we want to win, the decision is on the basis of the bids themselves."

Virgin has won praise for boosting train travel - nearly 23 million people used Cross Country services last year, which link Penzance in the South-West to Aberdeen in the North, via a number of stations in this region, including Darlington, Durham and Newcastle.

It has also invested hugely in trains, although complaints about overcrowding have been a recurring problem.

Arriva has no experience of running long distance inter-city train franchises in the UK, but has been keen to gain a stronger foothold in the UK rail market.

It, too, is bidding for the East Coast franchise, but is regarded as a comparative outsider.