A NEW rail company that proved a thorn in the side of GNER could be snapped up by a bigger rival before it runs its first train, it has emerged.

Grand Central Railways (GCR) fought off a legal challenge from GNER to secure the right to operate three services a day between Sunderland and King's Cross, beginning in May. The York company has since attracted interest from competitors, with UK rail freight operator EWS and Danish State Railways yesterday linked to a possible buyout.

Last night, GCR managing director Ian Yeowart, when asked if the company was for sale, said: "Everything is for sale." He added: "We never comment anyway because it just adds to speculation."

Andrew Taylor, a spokes-man for GCR's major shareholder, Lancashire transport group Fraser Eagle, said: "We are the majority shareholder in GCR and that is unlikely to change in the near future.

"There has, however, been a lot of interest in GCR and the company did prepare an information memorandum for companies who might be interested in buying it."

GNER - which will lose its East Coast Main Line franchise in 15 to 18 months -had bitterly opposed Grand Central's plans, saying they would eat into its profits.

Yesterday, Sir Richard Branson's Virgin Rail, which is expected to bid for the franchise, said it would not object to GCR's operations, raising the possibility that it could also be interested in a buyout.

A Virgin spokesman said: "We are a different company to GNER, with a different mindset."

Meanwhile, bidders for the East Coast franchise have been given until Monday, January 15, by the Government to submit expressions of interest.

Bidders will be asked to maintain the current level of services and improve safety, security and accessibility at stations.