Sir Richard Branson won a major victory last night as the Government’s decision to award the West Coast Main Line rail franchise to FirstGroup was scrapped.
FirstGroup was due to take over the West Coast Main Line on December 9 after winning a 13-year contract in August, see previous story.
But Branson’s Virgin Rail, which currently runs the line, launched a High Court challenge, calling the decision "insane".
The Department of Transport said it would no longer contest the judicial review.
Transport Secretary Patrick McLoughlin described the mistakes made by his department as "deeply regrettable and completely unacceptable".
He said: "A detailed examination by my officials into what happened has revealed these flaws, and means it is no longer acceptable to award a new franchise on the basis of the competition that was held."
He said one review would examine how the West Coast franchise competition went wrong, and what lessons could be learned.
The other review would look into the wider Department for Transport rail franchise programme, he added.
