Transport secretary Patrick McLoughlin has condemned his department's "damning failure" over the west coast mainline, after announcing a 23-month deal with Virgin Rail.
Sir Richard Branson's company, which successfully fought the government's initial decision to award the franchise to rival train operator First Group, has cut a deal with ministers which will see Virgin Rail run the lucrative train line until the end of 2014.
The announcement came as McLoughlin attempted to lay the blame for the Department for Transport's (DfT) fiasco at the door of civil servants - and not his predecessor in the job Justine Greening, now the international development secretary.
"This has been an extremely serious issue for my department and indeed for the civil service but I am determined we learn the lessons and get on with the job we are here to do," he told MPs in a statement to the Commons.
'All of our customers are international and we need those transport links to be as efficient and effective as possible'
Shadow transport secretary Maria Eagle attacked "all the efforts by the government to pin the blame on civil servants and to hide behind an internal HR process".
She said it was ministers who decided to change franchising policy, cut over a third of the DfT's staff and "failed to act" despite "warning after warning".
"Ministers have an obligation to ask questions, not just rely on what they're being told," she added.
McLoughlin quoted the Laidlaw report, published today, in response, which found that inaccurate statements had been given to the minister in writing.
"Ministers acted in good faith on the information they were given," he insisted.
The report found departmental staff cuts as a result of the coalition's austerity drive would not have prevented sufficient resources being found if the appropriate escalation of the issue had taken place.
"There was not a significant escalation of the issue," McLoughlin said. "There was a damning failure by the department and that must be put right."
The transport secretary announced the 23-month deal with Virgin Rail involves a deal to secure an hourly service from London to Glasgow and new services to Blackpool and Shrewsbury, which will begin by December 2013.