VIRGIN'S ambitious plans to build a 210mph rail route linking London with the North may have cost it the East Coast Main Line franchise, it has emerged.

Sir Richard Branson's rail company had proposed a new 120-mile stretch of high-speed track that would run alongside the London-Edinburgh route at its busiest point.

Virgin said the new track was needed to relieve congestion and allow it to run 210 mph high speed services.

GNER - the current East Coast operator - has contented itself with a plan to run better trains on the existing line.

Last week, The Northern Echo reported how Virgin Rail looks set to lose the battle to operate services on the East Coast Main Line.

The Strategic Rail Authority is tipped to hand the franchise to GNER when it reports next month.

But it has now emerged that Government ministers are considering a compromise.

The deal hammered out would see GNER winning the East Coast franchise, but not for the 20 years it hoped, while Virgin would be invited to develop its ambitious high-speed alternative.

The Strategic Rail Authority hopes to see a Virgin-inspired high-speed alternative to the East Coast Main Line open by 2012.

One rail industry analyst said: "Ironically, it seems as though Virgin may have shot itself in the foot by putting forward a case that was almost too good.

"The idea of developing a second high-speed line allows GNER to win the bid, but saves Virgin from a second outright rejection."

The £6bn proposals would involve about 120 miles of new track between Peterborough and Doncaster. Trains would then switch to the existing long distance line for the rest of the journey to the North-East.

Virgin chiefs reckon this will slash travel times. A trip from London to York would take about 90 minutes making commuting to the capital from the North-East a real possibility.