A government transport spokesman sparked fury in the Lords when he refused to apologise for the fiasco surrounding the West Coast main line rail franchise, which connects London with the West Midlands.

Earl Attlee insisted that a “highly regrettable mistake by officials, not by ministers” was responsible - prompting cries of “shame!” from the Opposition benches.

Transport Secretary Patrick McLoughlin announced last week that the decision to award the multi-billion-pound franchise to FirstGroup had been scrapped by the Government.

He said there were “significant technical flaws” in the bidding process because of mistakes by Department for Transport staff. Three civil servants have been suspended.

At question time in the Lords, Lord Attlee confirmed the estimated cost of reimbursing four companies for the cost of their bids will be about £40 million with additional costs for carrying out two independent reviews.

Labour’s Lord Kennedy of Southwark told him: “It’s very regrettable that you have not taken the first opportunity in Parliament to say sorry for this fiasco.

“You should be truly ashamed of what’s gone on. So I invite you now to apologise. Why is the Government saying there has been regrettable and unacceptable mistakes but no minister is taking responsibility.”

Lord Attlee replied: “Peers know perfectly well this was a highly regrettable mistake by officials, not by ministers.”