Firstgroup has been granted approval to compete with Virgin Trains on the East Coast mainline between London and Edinburgh.
The 10-year track access application approved by the Office of Rail and Road (ORR) will enable First to operate five trains a day each way from Kings Cross via Stevenage, Newcastle and Morpeth by 2021.
The rail operator said the average fare will be less than £25 with free wifi on board. There will only be economy class offered on the service.
First Group said the new low fares will persuade many passengers to make the “greener switch” to rail, and added that business travellers will benefit from the first service of the day from London arriving in Edinburgh by 10am, one hour earlier than is possible now.
It will introduce five new intercity electric trains, offering an additional 1.5 million seats on the route every year.
However Stagecoach, which runs the line exclusively at present and has a 90 per cent stake in Virgin Trains East Coast , said the decision to open up the route to competition would impact revenues at its services.
Chief executive Martin Griffiths said: “With respect to the decision on open access between London and Edinburgh, we do not believe the granting of these services within a franchised system and without a level playing field is in the best interests of passengers, taxpayers or communities.
“We will assess the ORR decision and implications in detail and review our options,” he added.
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