Scottish transport giant Stagecoach has lost its rail franchise court case against the UK Government.

The Perth-based company co-founded by Sir Brian Souter said the outcome of the case over an earlier Whitehall ruling about three UK rail franchises was  "disappointing" but that it would not be challenged.

It said in a statement: "Stagecoach Group plc notes the decision of the High Court today in respect of its claims against the Secretary of State for Transport regarding decisions to disqualify the group from three rail franchise competitions.

"The court ruled against the group's claims."

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It continued: "We believe there were important issues which needed to be determined by the court to help secure the future of the country's rail system and our view remains that we were right not to accept the risks in these contracts. 

"Nevertheless, while we are disappointed at today's ruling, we accept the decision and move on.

"The country is facing a huge challenge in fighting the Covid-19 pandemic, and all of our energies are focused on ensuring our transport networks help the national effort at this critical time."

Sir Brian, who established the company with sister Dame Ann Gloag in 1980, stepped down as chairman of the company at the turn of the year but remains the second-biggest shareholder.

The company has all but exited the UK rail franchising business and ceased running the West Coast in its long-running partnership with Virgin Trains when the franchise was transferred to FirstGroup and Trenitalia.

Last year Stagecoach said it would no longer bid for new UK rail franchises after it was ruled out of the running for the East Midlands, South Eastern and the West Coast when the Department of Transport said it did not take on sufficient risk for a railway workers' pension scheme.

Stagecoach took the legal action against the Government over the three disqualifications.

A Department for Transport spokesman said: "We strongly welcome this decision, which finds our franchise process was fair, our conduct was transparent, and the disqualification at the heart of this case was proportionate.

“Our focus now rightly remains on tackling the Covid-19 pandemic, helping ensure the safety of passengers, and working to build a railway that works for everyone as we begin the process of recovery.”