GNER chiefs will vent their fury at rail regulators over the next few days, after learning their plans to extend their services are set to be blocked.

The York-based firm, which employs hundreds of city workers, said it would have to "review its options" after the Office of Rail Regulator (ORR) said GNER's proposals to extend the number of services it ran from Leeds to London was likely to be rejected.

As reported in later editions of yesterday's Evening Press, the ORR instead said it was "minded to approve" York rail company Grand Central's plans to run three services each way from Sunderland, calling at Thirsk and York, to London. That means GNER's expansion plans would be left in ruins.

The regulator will make its final decision in the coming weeks, but GNER said there could be "serious implications" if its Leeds to London plans are scuppered.

Its franchise will not be at risk, but the plan to use Leeds to increase capacity was a key part of its deal to run services on the East Coast Main Line, signed with the Government in March.

GNER is paying the Government £1.3 billion over the life of the franchise and saw the Leeds to London route, the fastest growing in the country, as crucial to its plans to increase passenger numbers.

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

The firm today said it was "too early" to assess the full impact of the ORR's announcement, but confirmed it would be making its views known on the probable decision before the February 6 deadline.

He said the increase in Leeds to London services had been discussed since 1997 and public money was spent to make them happen.

The £240m redevelopment of Leeds station and the £12m Allington Chord scheme were also justified partly on the basis that they would permit the proposed increase in GNER services between Leeds and London.

Mr Gelson said the decision meant GNER could also be forced to abandon plans to further increase Leeds-London services in the future by electrifying 15 miles of track between Neville Hill, east of Leeds, to Hambleton Junction, between York and Doncaster on the East Coast Main Line.

He said: "The project could have acted as a catalyst for other electrification schemes between Leeds and York, and between Leeds and Selby, and would have acted as an important diversionary route for Anglo-Scottish services. This is clearly not good news. How damaging it is remains to be seen. We will be considering what we do next."

Updated: 09:18 Saturday, January 28, 2006