Bus and train operator Stagecoach is to take the Department for Transport to court early next year over the Government's decision to ban the firm from bidding for three rail contracts.

The firm was blocked from bidding for the East Midlands, West Coast and South Eastern franchises over pension deficit concerns.

The cases will be heard in the High Court in the new year with the Government unlikely to be willing to settle in case it encourages others to make similar claims.

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Stagecoach said: "We continue to pursue our claims against the Secretary of State for Transport regarding his decisions to disqualify us from three rail franchise competitions. The three cases are due to be heard in the High Court in early 2020."

Despite already losing the East Midlands franchise to Abellio - a route Stagecoach had run for 12 years - executives said they have been working closely with the new operators to ensure a smooth handover.

The company added: "We and our joint venture partner, Virgin (Trains), will approach the forthcoming transition of the West Coast franchise in the same spirit of collaboration."

It was announced in August that FirstGroup would take on the route.

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On its bus business, which operates in towns and cities across the country, there was better news, particularly at its London division.

The company said it received higher than expected payments for providing "favourable" service and was confident of winning more contracts in the capital.

Its regional operations saw a 1% like-for-like boost in revenues. This was lower than expected due to tough comparisons last year with the summer heatwave and the end of rail replacement services in the Derby area.

Executives said they want to expand the division and are looking at new partnerships with airports, festivals and events across the UK.