Those travelling on the line were to benefit from shorter journey times of just under four hours and extra seats.
Virgin Trains had intended to cut nine minutes by 2014 as part of an £800 million investment strategy included in its bid to retain the franchise until 2026.
The firm has been given a 23-month extension after the collapse of the competition to take over the West Coast route.
But this will not include the journey time improvements.
Chris Gibb, Virgin Trains's chief operating officer, said an order for 21 six-coach tilting electric Pendolinos, which would have replaced the diesel Voyagers from Edinburgh and Glasgow to Birmingham, had been placed in doubt due to the temporary nature of the franchise.
He said: "The option to have a four-hour journey from Glasgow to London has been ruled out and there is doubt about the new trains.
"When the long-term franchise is set, it will be too late for some of those things."
Virgin Trains, 49% owned by Stagecoach, lost out in the original contest for West Coast rail services in August to Aberdeen-based rival First Group.
This was reversed after a legal challenge which led to the DfT admitting the process suffered "serious technical flaws".
A report by Centrica boss Sam Laidlaw into the fiasco was heavily critical of DfT officials who were found to have conducted a deeply flawed process which lacked transparency and fairness, ignored their own rules and ran a risk of legal challenge.
A second report into the UK Government's wider railfranchising programme is due to be published early next month.
Virgin had planned to upgrade signalling in Scotland to allow its Pendolino trains to tilt along some of the tight bends of the track and increase line speeds.
The current fastest journey would have been brought down to three hours 59 minutes as part of a non-stop daily Glasgow-London Euston service departing Glasgow at 10.30am, with the northbound an hour later. The average journey of four hours 30 minutes would have also been reduced by nine minutes.
Although technically capable of travelling at speeds of up to 140mph, the Pendolinos are restricted to a maximum of 125mph on the West Coast Main Line (WCML), which connects Glasgow to London, with the section north of Carstairs one of the slowest legs of the journey.
However, Mr Gibb said track owner Network Rail was planning to replace the outdated Motherwell signalling box, which covers the section to the Scottish border, on a "like-for-like" basis, which would not allow any rise in train speed.
He said: "I'm afraid nothing is going to happen unless someone is prepared to pay a bit more."
Although the order for building the trains would be placed with Italian firm Alstom, many of the more skilled jobs involved in assembling the trains would be created in the UK.
A spokesman for Network Rail confirmed the replacement of the Motherwell signal box would be on a like-for-like basis.
A DfT spokesman said: "We are determined to ensure not only that passengers continue to experience the same levels of service they have in the past, but that services improve, and we are confident passengers will be best served by the current contract.
"We are working with Virgin Trains to explore the options available to us to meet future rolling stock needs on the WCML."
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