Richard Branson: Profit is not that important to me

Sir Richard said the Department for Transport did not follow its own rules over the bidding process which saw a new 13-year contract awarded to rival FirstGroup. He also cast doubt over FirstGroup's ability to deliver the contract.

He said of his own failed bid:?"The profit motive is not that important to me."

He said Virgin was recommending the rules and regulations for franchises be reviewed and that the award of the West Coast franchise should be delayed.

But Tim O'Toole, FirstGroup chief executive, said any allegations levelled at his company's bid by Virgin were 'flat wrong'.

The two men addressed the House of Commons Transport Committee yesterday after Virgin launched a challenge against the decision to award a 13-year West Coast franchise to FirstGroup. The line has been run by Virgin since 1997.

It means the prospect of a direct link between Shrewsbury and London – which both have pledged to provide as part of the new contract – could be delayed.

Virgin has offered to temporarily run the line for free if the legal challenge means FirstGroup does not take over on December 9.

Sir Richard said: "The Virgin bid is more deliverable and financially robust.

"The decision is bad for the country, bad for passengers and bad for passengers on other franchises.

"This bid by FirstGroup is absolutely preposterous. It's completely ridiculous. It's taking the system for a ride."

Mr O'Toole followed Sir Richard in giving evidence to the committee.

Asked about concerns that jobs would be lost, Mr O'Toole said the FirstGroup bid assumed staff levels would be the same for the first five years.

Asked what would happen after five years, Mr O'Toole said it was 'difficult' to predict.

The franchise was due to start in December, although Shropshire's link to London was not due to be launched until 2016.