Rail firms hoping to secure the contract for one of the Birmingham to London franchises have lodged a legal action against the Government.

Stagecoach, Virgin Group and French state-owned operator SNCF were planning to tender for the new ‘West Coast Partnership’ franchise which is due to be awarded in June and commence next March.

The new-look franchise includes the existing Birmingham New Street to London Euston service and also HS2 services between the two cities when they commence in 2026.

The tender is set to replace the current InterCity West Coast franchise which has been held by Virgin Trains since its launch in 1997 and operates on the West Coast Mainline between the capital and Glasgow via Coventry, Birmingham International, New Street, the Black Country and North West.

But in April, the Government announced it was barring Stagecoach from bidding for the new West Coast Partnership and also the East Midlands and South Eastern franchises.

It prompted Virgin founder Sir Richard Branson to predict the end of the train operator, which is a joint venture between Virgin Group and Stagecoach, even warning that it could disappear before the end of 2019.

A few weeks ago, a similar claim was lodged by Stagecoach against the Department for Transport (DfT) over its ban on bidding for the East Midlands rail franchise.

Officials told Scottish group Stagecoach that it could not submit a bid unless it was willing to take on potentially huge pensions liabilities, which is unviable according to the transport group and something it refuses to bear.

Chief executive Martin Griffiths said: "We believe the rail system should be about appointing the best operator for customers, not about passing unquantifiable, unmanageable and inappropriate risk to train companies.

"It is disappointing that we have had to resort to court action to find out the truth around the DfT's decision-making process in each of these competitions.

"However, we hope court scrutiny will shine a light on the franchising process and help restore both public and investor confidence in the country's rail system."

The claim has been brought joint venture West Coast Trains Partnership, in which Stagecoach has a 50 per cent share, SNCF 30 per cent and Virgin 20 per cent.

Patrick McCall, senior partner at Virgin, added: "It is extremely frustrating that the reason our bid was disqualified has nothing to do with looking after passengers or running a good train service."

The DfT previously said: "Stagecoach is an experienced bidder who knowingly submitted non-compliant bids on all competitions.

"In doing so, they disqualified themselves. We do not comment on legal proceedings.

"However, we have total confidence in our franchise competition process and will robustly defend decisions that were taken fairly following a thorough and impartial evaluation process."