An independent report into the West Coast rail franchise fiasco found "serious problems" and "unacceptable flaws" in the bidding pro- cess, a minister has said.

UK Transport Secretary Patrick McLoughlin has disclosed the contents of the study, which highlighted a series of errors by Department for Transport officials in the handling of the franchise bid.

The report – produced by businessman Sam Laidlaw – found ministers were given "inaccurate reports" on which to base the ultimate award of a new 13-year West Coast franchise to transport company FirstGroup last August.

It was only when Sir Richard Branson, whose Virgin Trains' firm lost out to FirstGroup in the bidding, mounted a legal challenge to the decision that the flaws in the process were discovered.

Mr McLoughlin scrap- ped the West Coast bidding competition in Octo- ber, which will cost taxpayers at least £40million.

Before the report was published, he said Virgin would carry on running West Coast trains until November 2014 when a new franchise will start.

Three DfT civil servants were suspended after the franchise process was axed. The bans have since been lifted.

Mr McLoughlin told MPs that the report would make "uncomfortable reading for the department".