TRAIN operator GNER's bid for compensation following the winter rail chaos was in doubt last night after it emerged that it used a collapsed insurance company.

GNER, which runs the East Coast main line between London and Edinburgh, intends to pursue Independent Insurance's liquidators for the loss-of-business claim.

But with reports suggesting GNER needs £65m because of the disruption, it is far from certain how much compensation it will get.

The group said its prime target for the post-Hatfield pay-out claim remained rail operator Railtrack rather than Independent Insurance.

A spokesman said: "We are confident we will recover most, if not all, of our lost revenues."

He declined to discuss specific details of GNER's compensation claims but said the company was hopeful of an agreement with Railtrack.

He said: "Our cover with Independent Insurance will be secondary to that, but it is something we intend to pursue. We will be doing all we can to work with the liquidator as far as Independent Insurance is concerned."

Independent, which went into provisional liquidation last week, insured GNER against business interruption.

Liquidator Pricewaterhouse Coopers (PwC) is looking at ways of safeguarding the interests of policyholders.

Last week, PwC secured a deal with Royal and Sun Alliance to take on Independent's 250,000 council tenant policyholders.

GNER is one of a number of rail operators seeking compensation with Railtrack for loss of business following the recent rail repair programme.

The work was carried out after last October's Hatfield crash, which involved a GNER train.