Embattled rail and bus operator FirstGroup has named the boss of insurance giant Aviva as its new chairman in a move ending a six month for his replacement.

John McFarlane, chairman of Aviva, will take on the same role at FirstGroup in place of Martin Gilbert, who heeded investor calls in May by announcing plans to step down after the firm tapped investors for £615 million and cancelled its shareholder dividend.

Mr McFarlane will join the board of FirstGroup immediately and will take on the post of chairman on January 1.

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The appointment comes as Aberdeen-based FirstGroup recovers from a turbulent year in which its growth plans were derailed by the botched bidding process surrounding the West Coast mainline.

It reported half-year pre-tax losses of £8 million last month, although this was a marked improvement on the £20.6 million loss seen a year earlier.

The group, which operates First Great Western, First Capital Connect and First ScotRail, said on reporting interims that it was getting back on track and hoped to start repaying dividends from the close of its financial year.

It is pouring £1.6 billion into a four-year investment programme and tackling debts of nearly £2 billion.