THE battle to run the rail network's flagship East Coast Main Line was won today by the present operators GNER.

The company beat off three contenders by agreeing a four-fold rise in the amount it pays to run services.

GNER will pay £1.3bn to the Treasury over the life of the franchise, which will be seven years, or extended to 10 years if performance targets are met.

It raised fears of massive fare rises for passengers.

Bob Crow, leader of rail union RMT, said: "This is not good news for the travelling public or for our members.

"This franchise should have been brought back in-house.

"Instead, we have the prospect now of higher fares, service cuts and a squeeze on our members' terms and conditions."

The Strategic Rail Authority said the benefits for passengers would include new half-hourly Leeds-London throughout the day.

Today's franchise award was described as "the biggest financial transaction in European railway history".

Challengers to GNER - which took over East Coast services in 1996 - included Sir Richard Branson's Virgin Trains.

The other two companies that missed out in the bidding process were Danish rail company DSB and UK transport giant FirstGroup.