YORK rail passengers are set to benefit from new services to London - but city company GNER was left reeling today after chiefs said its bid for extra trains would be turned down.

The Office of Rail Regulation (ORR) said it was "minded to approve" an application from Grand Central to run three new direct services between Sunderland and London, calling at York and Thirsk.

Ian Yeowart, pictured, managing director of York-based Grand Central said he was "absolutely delighted" with the decision.

"We've worked long and hard to try and achieve this," he said.

"It's good news for all of the North East and the people of York. There is competition now and we will provide different price structures. We understand GNER will be disappointed."

Grand Central would be the second "open access" operator, along with Hull Trains to provide passenger services on the East Coast Main Line.

If the ORR confirms the application, Grand Central's application to serve Bradford will be turned down.

The ORR said that would also apply to York-based GNER's application to run extra trains from Leeds to London.

GNER, which employs hundreds of staff in York, said it was "genuinely surprised and disappointed at the announcement".

Its franchise contract with the Government includes a commitment to increase services between Leeds and London from 53 to 65 per weekday by December 2007, subject to the ORR's blessing.

Today GNER said it "fundamentally disagrees" with the ORR's draft conclusions.

GNER spokesman Richard Allan said: "We are extremely puzzled at the ORR's decision. It is astonishing that the ORR has rejected GNER's additional Leeds-London services as that is what the Government, in awarding the East Coast franchise, contracted GNER to deliver.

"The ORR's own economic analysis concluded that the highest level of economic benefits was delivered by GNER's proposed services. GNER is reviewing all its options."

The ORR decision means that the Leeds-London route will be restricted to 53 services per day.

Bill Emery, ORR chief executive, said: "We have considered the proposals for additional services carefully in light of our statutory duties.

"We have had to consider how to balance the interests of rail users in different parts of Yorkshire and the North East and take account of the effect of new services on existing franchised services.

"We believe that the proposed decision would offer the best outcome for rail users. It would bring significant benefits to passengers on the route and particularly to those areas that would receive a new direct service connecting them with London."

Before reaching its final decision, ORR is seeking comments on its proposed decision, imposing a deadline for comments of February 6.

Updated: 12:50 Friday, January 27, 2006