VIRGIN Trains East Coast is to press ahead with a major redevelopment of York Railway Station and upgrade of its train fleet, despite its franchise ending early.

The news came as York Central Labour MP and Shadow Rail Minister Rachael Maskell attacked the Government decision to terminate the franchise in 2020, claiming taxpayers and travellers had been "sold down the river".

A Virgin Stagecoach spokesman confirmed the company intended to go ahead with a massive revamp of the station and said a planning application was set to be submitted to City of York Council imminently.

It was also pressing on with the introduction of a new fleet of Azuma trains, which is due to start coming into operation next year.

The Press revealed in May that Virgin, which runs the station as well as train services down the East Coast Mainline to London, was planning a major revamp, including new shops and a first class lounge.

It was also proposing a more open plan ‘customer zone’ to replace the station’s traditional travel centre, which met with stiff opposition from some.

Transport Secretary Chris Grayling announced on Wednesday that a new East Coast Partnership would take on responsibility for both trains and track in 2020.

Stagecoach said the minister had given a clear statement of intent to seek to negotiate new terms for the East Coast franchise with Virgin Trains East Coast and it was hopeful of reaching an agreement within the next few months.

Ms Maskell claimed yesterday the Virgin/Stagecoach franchise should have paid £3.3 billion to the state but it would now only pay a fraction of this amount.

She said: “These reforms could have serious implications for the much needed upgrades needed on the East Coast Line, an issue which is frustrating passengers when trains are delayed due to the ageing infrastructure.”

She said the nationalised East Coast operation had returned £1 billion to the taxpayer and established itself as one of the country’s best train companies.

A Department for Transport spokesman said it would continue to receive premiums from the East Coast operator and had set out plans to end the operational divide between track and train.

“The East Coast Partnership will establish the first of a new generation of integrated regional rail operations,” he said. “In 2015, Stagecoach made financial commitments which they have met to date and we expect them to continue to do so.”

He added that since taking over the franchise Stagecoach had also – on average - paid 20 per cent more back to the taxpayer than the nationalised business.