A budget train service is set to launch between London and Edinburgh with stops at Stevenage, Newcastle and Morpeth.
First Group, which also operates Great Western Railway (GWR) and TransPennine Express, has won approval from the UK rail regulator to run the service with an average fare of £25 or less.
The train operator says it will start operating five trains a day from 2021, which could damage the Virgin East Coast franchise which offers one way tickets from London to Edinburgh for £40 and has been heavily criticised for the cost of travelling on the East Coast route.
Tim O’Toole, chief executive of FirstGroup, said: “Our brand new trains will be cheaper than other rail services, greener than the plane, quicker than the coach and will get passengers from London to Edinburgh earlier than they can arrive now, and all for an average fare for less than £25.”
Stagecoach, which runs the Virgin Trains East Coast service, says its revenues are likely to take a hit, although the joint venture has won permission to increase its services on the line and offer stops in Bradford, Lincoln, Harrogate and Middlesborough.