Shadow Transport Secretary Maria Eagle said train firms might sue for losses suffered when the UK Government scrapped its decision to award the franchise to FirstGroup.

The company's share price fell 20%, wiping millions off its value.

Transport Secretary Patrick McLoughlin faced calls to abandon plans to re-privatise the East Coast main line amid the mess surrounding the West Coast deal, which has sparked two inquiries and will cost taxpayers at least £40 million in refunding bidders.

Ms Eagle said: "The cost to taxpayers is likely to be in the tens of millions of pounds more.

"You're going to be handing millions over to companies, millions spent running three competitions for this franchise when you should have only been running one, and millions more if companies decide to sue for the losses your department's incompetence has caused them.

"Don't taxpayers deserve a truly independent inquiry into who was to blame for their money being poured down the drain?"

Mr McLoughlin said he ordered two inquiries because "I wanted to get to the bottom of this".

Labour MP Chi Onwurah said: "We have seen GNER fail, National Express fail, but now we have East Coast Trains returning £187m to taxpayers. Why on earth would the minister want to swap that for the unmitigated disaster of the West Coast tender?"

Mr McLoughlin said the contracting out would go ahead as it delivered value for money.