RICHARD Branson has defended the early termination of the East Coast rail franchise, a week after Lord Adonis quit his government post over the move.

Resigning last week, Andrew Adonis cited the deal alongside Brexit as reasons for leaving his post as chairman of the National Infrastructure Commission, claiming Transport Secretary Chris Grayling had effectively bailed out Virgin Trains East Coast.

The transport provider – which is majority owned by Perth-based Stagecoach – had agreed to pay £3.3 billion to run the key service over eight years until 2023.

But in November Grayling announced that a new East Coast Partnership will take on responsibility for both intercity trains and track operations on the route in 2020. The news saw Stagecoach shares rise by as much as 13 per cent, but Adonis said it would cost the taxpayer £2bn.

Writing on his blog, Branson said Virgin Trains East Coast had bid for the franchise on “a promise of a huge upgrade of the infrastructure by Network Rail” that would have allowed it to carry more passengers than it currently does.

He said “considerable delays” to the project, as well as “poor track reliability” will cost the company, adding: “As the facts became clear about these issues (as well as a drop in Britain’s GDP growth) a discussion with government had to take place and a pragmatic solution was needed to keep delivering improvements and investment.

“The critics argue that my partners at Stagecoach and I are somehow benefiting from this. The fact is we have both lost significant amounts – well over £100m in total – and have not received a penny in dividends.”

The East Coast mainline spent six years in public hands after previous franchisee National Express pulled out. Branson said: “When the operation of the line was under public ownership there was little investment and the services were not modernised.

“Contrast that with the £140m we are investing, which has already seen a refurbished train fleet, more services, new car parking and cycle facilities and free films and TV on board.”