The Department for Transport (DfT) did not follow its own rules over the West Coast main line franchise bidding process, Virgin boss Sir Richard Branson told MPs yesterday.

The rail franchise system is "flawed", Sir Richard told the House of Commons Transport Committee.

He was giving evidence after Virgin Trains launched a judicial review of the DfT's decision to award a new 13-year West Coast franchise to rival transport company FirstGroup.

Virgin has run the Glasgow to London line since 1997.

Sir Richard told MPs: "The Virgin (West Coast franchise) bid is more deliverable and much more financially robust.

"The DfT did not follow their own rules. The franchise system is flawed. The decision (to award the franchise to FirstGroup) is bad for the country, bad for passengers and bad for passengers on other franchises."

Committee member Kwasi Kwarteng (Conservative, Spelthorne) said people might say that Virgin, in taking legal action, was "bringing in the heavy artillery" and that Sir Richard was "using your prestige and fame" to challenge the decision.

Sir Richard replied that across various modes of transport he had "created a number of ventures with the principle aim of making a real difference to those sectors".

He went on: "The profit motive is not important to me."

Sir Richard said that FirstGroup had "some cash issues". This was put to FirstGroup chief executive Tim O'Toole, who replied: "No, we don't have a cash problem."

Mr O'Toole added that allegations Virgin had made about the FirstGroup bid were "flat wrong".

He said Virgin had been making "bad guesses about our bid, because they have not seen our bid".