RAIL chiefs last night said that FirstGroup was still in the running to operate East Coast Mainline services despite its bid having been referred to the Competition Commission.

The Strategic Rail Authority said the transport operator could be named next month as the preferred bidder for the route even though the Competition Commission may not report back on its application until as late as June.

First is one of four firms, including current incumbent GNER, that are hoping to win the contract for the new East Coast franchise, beginning on May 1.

It emerged last month that the Office of Fair Trading (OFT) had referred the FirstGroup bid to the Competition Commission.

The reason was concerns that it could become the only operator between certain points on the route, which could potentially be to the detriment of rail travellers.

FirstGroup already holds the Hull Trains and TransPennine Express franchises.

Should it win the East Coast as well, it would have secured a monopoly on mainline routes between Doncaster, Grantham and London and also on some routes in North Yorkshire.

Last night, Paul Latham, a spokesman for the Strategic Rail Authority, said it would not role out FirstGroup just because the bid had been referred by the OFT.

He said: "Our own process is moving forward and we are not going to hold that up because of a separate related process.

"If they were announced as a preferred bidder then we would hope that they could resolve these competition issues.

"Only if they were irresolvable would it affect our process."