Scottish transport giant Stagecoach has launched legal action against the Department for Transport over its disqualification from the East Midlands rail competition, the company said today.

The move comes after it emerged last month that the Perth-based group, whose chairman is businessman and philanthropist Sir Brian Souter, had been disqualified from bidding for three franchises.

Abellio, which operates ScotRail, was appointed to run the East Midlands franchise from August.

Stagecoach was also barred from bidding for the new franchise for the West Coast service, which it currently runs with Virgin, and for the South Eastern service it planned to run with Alstom.

Group chief executive Martin Griffiths said: "We remain deeply concerned at the Department for Transport's (DfT) procurement of the three most recent rail franchise competitions and the rationale behind its decisions.

"Despite our continued requests for full transparency around these matters, many fundamental questions remain unanswered.

"As a result, regrettably we have had no option but to commence legal action against the DfT to ensure the serious issues involved and the DfT's opaque decision-making are subject to proper public scrutiny."

He added: "In view of the legal action we have taken today, we believe it would be untenable for the DfT to proceed to sign any contract for the East Midlands franchise without a full and proper review of the procurement of that franchise to help restore public confidence in the process."

A DfT spokeswoman said: “Stagecoach is an experienced bidder who knowingly submitted non-compliant bids on all competitions. In doing so, they disqualified themselves.

“We do not comment on legal proceedings. However, we have total confidence in our franchise competition process and will robustly defend decisions that were taken fairly following a thorough and impartial evaluation process.”