The government insisted that the process for a long-term rail franchise in East Anglia would not be delayed by the scrapping of the competition for the West Coast mainline.

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Transport Secretary Patrick McLoughlin announced that the franchise to run trains on the West Coast line had been cancelled following the discovery of “significant technical flaws” in the way the franchise process was conducted.

The government also ordered an independent review to be undertaken into what went wrong with the West Coast competition and another review will look into the Department for Transport’s rail franchise programme. Both will be overseen by leading business figures.

The government said all other outstanding rail franchise competitions had been paused. However, a Department for Transport spokesman said that only affected the Great Western, Essex Thameside and Thameslink competitions.

The process of awarding a 15 year contract for the Greater Anglia franchise is due to start in the middle of next year as timetabled with the successful bidder taking over in July 2014.

Abellio, operating under the name of Greater Anglia, was awarded a short-term franchise for local services last year, which began in February.

Mr McLoughlin said: “I have had to cancel the competition for the running of the West Coast franchise because of deeply regrettable and completely unacceptable mistakes made by my department in the way it managed the process.

“A detailed examination by my officials into what happened has revealed these flaws and means it is no longer possible to award a new franchise on the basis of the competition that was held. I have ordered two independent reviews to look urgently and thoroughly into the matter so that we know what exactly happened and how we can make sure our rail franchise programme is fit for purpose.”

The West Coast contract was granted to FirstGroup in August after Virgin’s rival made an offer of £5.5bn to run the line for 13 years. Following the decision, Virgin, which currently runs the line, launched legal action against the decision.

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