Business leaders have welcomed the decision to award the West Coast Main Line contract to Virgin until 2017 – a full five years after Sir Richard Branson was set to lose it.

Birmingham Chamber of Commerce has backed Transport Secretary Patrick McLoughlin’s announcement that Virgin would now retain the franchise for a further three years.

Chamber press and PR director John Lamb said the Government’s decision to further extend the contract to the Branson group was a boost for the region.

The £5 billion deal collapsed last October after FirstGroup had been originally awarded the franchise.

The tendering process was subsequently halted amid revelations of miscalculations by the Department for Transport, which led to the suspension of three officials.

Officials were accused of not following their own guidelines, not treating the bidders equally, failing to include inflation in their figures and ignoring problems before the agreement collapsed.

Before Christmas the Government announced that Virgin would run the West Coast service – which connects Birmingham with London, Manchester, Liverpool and Scotland – until November 2014, but the franchise has now been extended for a further three years.

First Group was originally awarded the £13 billion, 13-year deal in August last year but Virgin launched a legal challenge.

As officials prepared for the High Court proceedings, ‘significant technical flaws’ in the contract competition were unearthed.

Rail minister Simon Burns said he was confident the new contest would be ‘cock-up free.’

He said: “We have learnt the lessons of past mistakes with the West Coast main line so we can move forward.”

Mr Lamb added: “This has finally drawn a line under the uncertainty over the circumstances in which Virgin appeared to have lost the contract.

“Generally, the Virgin service has been good.

‘‘The problem has been capacity because most trains are packed, which highlights the case for HS2.”