RAIL operator GNER was last night on the verge of winning the ferocious battle to run the East Coast Mainline for the next 20 years.

The Northern Echo understands from a senior source within the Strategic Rail Authority that the operator is poised to win the lucrative franchise ahead of Richard Branson's Virgin.

The decision would usher in billions of pounds of new investment to the line, the main link between the North-East and London which is thought to be key to the economic success of the region.

A decision on the franchise was made by the SRA board on June 7 and a report has since been passed to Secretary of State for Transport Stephen Byers.

But the announcement was delayed while aspects of GNER's bid were clarified.

Mr Byers, who took over from John Prescott in the post-election cabinet reshuffle, is now being asked to give final approval to the choice of GNER.

Industry sources say GNER could be hailed as the winner within the next fortnight, although the SRA has previously said an announcement would not be made before the end of the summer.

Last night, an SRA spokesman attempted to play down prospects of an imminent announcement. He said: "When Stephen Byers' office comes back to us we hope then to be in a position to make an announcement, but it is not imminent."

GNER, which says it will create 2,000 new jobs if it wins the franchise, has promised to increase capacity and cut journey times on the East Coast Mainline in a £2bn upgrade.

Its plans include provision for 140mph high speed tilting trains and new and upgraded railway stations.

Virgin envisages an entire new line to accommodate European-style bullet trains with speeds of up to 200mph.

The SRA has been under pressure for several months to announce the franchise winner and an expected decision has been delayed several times.

GNER and Virgin were both told to revise their bids by the SRA and the franchise process also stalled when it was revealed the cost of upgrading the line could almost double.

Two fatal crashes on the railway line - Hatfield and Selby- have hindered work on the franchise bids by the rail industry.

The repeated delays have greatly frustrated passenger groups and local authorities in the North-East which hope that the upgrade of the link will have a positive economic knock-on effect.

Ernie Preston, secretary of passengers watchdog the North-East Rail Passengers Committee, has been critical of the length of time taken to make the franchise decision.

He said: "From a passenger's point of view a decision needs to be made right now, not tomorrow.

"Until it is made there will no investment and no improvement of services on the East Coast Mainline."

The upgrade of the line will be funded by a combination of the franchise winner, the SRA and Railtrack.

Railtrack says it has a "menu of choices" on offer, but cannot press ahead with its work until it knows who the franchise winner is.