STAFF at Virgin Trains East Coast have been told it is unlikely the firm will lose the right to run on the line, despite pulling out of its current contract.

Managing director David Horne told staff he believed the Department for Transport would not take control of East Coast services.

Transport Secretary Chris Grayling said last month he would either put the franchise into public control through an operator of last resort or negotiate a short-term deal with the incumbent.

Mr Horne’s message to staff said the operator of last resort option was an “unlikely event”.

In November 2014, Virgin Trains East Coast - a joint venture between Stagecoach and Virgin - was awarded the franchise to run trains between London King’s Cross and Edinburgh, via York, for eight years, but Stagecoach reported losses on the line, and last November it was announced the franchise would be terminated in 2020. Critics described the move as a “bail out”, claiming it would cost taxpayers hundreds of millions of pounds in lost payments by the operator.

Meanwhile, Grand Central has announced a plan for new services in the region, including six daily return services from the North East to London, and 1,600 daily seats to and from the capital.

Following consultation, the application will be submitted to the Office of Rail and Road (ORR) for consideration, and if given the go-ahead, would be operated by Grand Central’s refurbished Adelante fleet.