First Group gets green light for budget Edinburgh to London rail service costing less than £25

The service, which will also stop at Stevenage, Newcastle and Morpeth, should be operational by 2021

The 10-year deal would allow East Coast Trains to start operating five trains a day each way between Edinburgh and London for an average fare of less than £25 (Simon Calder)

First Group, a train operator, has won approval from the UK rail regulator to launch a budget service between London and Edinburgh, the company said.

First Group said that the 10-year deal would allow East Coast Trains to start operating five trains a day each way between Edinburgh and London for an average fare of less than £25.

The service, which will also stop at Stevenage, Newcastle and Morpeth, should be operational by 2021.

Tim O'Toole, chief executive of FirstGroup, said: “Our brand new trains will be cheaper than other rail services, greener than the plane, quicker than the coach and will get passengers from London to Edinburgh earlier than they can arrive now, and all for an average fare for less than £25.”

Stagecoach, which runs the Virgin Trains East Coast service on the same rails, has said its revenues will be harmed. Virgin Trains East Coast offers one way tickets from London to Edinburgh for £40. It has the franchise to continue to use the line until March 2023 at the earliest.

Virgin Trains East Coast has also won permission to increase its services on the line and its branches between Edinburgh and London, which it plans to do starting from at least May 2021. It will offer stops in Bradford, Lincoln, Harrogate and Middlesborough.

Stagecoach, which owns 90 per cent of Virgin Trains East Coast, said it was considering its options after the ruling by the regulating body, Office of Rail and Road.

Martin Griffiths, Stagecoach chief executive, said in a statement that the decision was not in the interests of passengers or taxpayers.

But the ORR said it had carefully weighed up the impact on existing operators and the government and decided that the new service would give passengers more choice and provide more frequent trains to under-served towns and cities.

“Our decision has been informed by extensive analysis, formal industry hearings and detailed engagement with all parties," John Larkinson, ORR director of railway markets and economics, said.