Bidders for the lucrative TransPennine rail franchise have been gagged by the industry's regulatory body, the Evening Press has learned.

Speculation that the inter-urban franchise, which runs through York, has been handed to controversial southern operator Connex has caused uproar in the industry.

And in the latest twist, the Strategic Rail Authority (SRA) has told the three bidders, Connex, Arriva and FirstGroup, that they must not discuss their bids publicly.

Outside of self-imposed commercial reasons, train licence bidders are normally free to discuss their bids for the franchises that are up for grabs or renegotiation.

But an industry insider told the Evening Press: "The bidders have been told not to discuss the bid. "This is an unprecedented step and shows the problems this decision is going to cause.

"Speculative stories in the media seem to have upset the SRA, so the decision is being played down until after the election."

The source added that he was aware of the existence of a draft press release confirming the SRA's decision to hand the franchise to Connex.

It has been widely reported that the French-owned operator, the only one to be stripped of a franchise by the SRA, is to be given preferred bidder status for the Liverpool to Hull service.

A number of northern MPs have indicated they will call for an adjournment debate in the next parliament if Connex is given the franchise.

Connex lost the South Central network after poor performance and deteriorating relationships with passengers since privatisation. None of the three operators was able to comment on the gagging story.

A spokesman for the SRA said only that it "could not discuss speculation".

* Both Virgin and GNER, rival bidders for the East Coast Main Line, have poured scorn on reports in a Sunday newspaper claiming Sir Richard Branson's company had been handed the lucrative Anglo-Scottish franchise.

Both train operators dismissed the story as pure speculation and said it had no basis. A decision is expected within days of the General Election.

Updated: 10:47 Monday, May 21, 2001