GNER has claimed the other two firms were receiving "state aid"

GNER, which runs intercity trains on the East Coast Main Line, argued that ORR's decision to allow Grand Central to operate on the route was unlawful.

Grand Central is set to run a London to Sunderland service.

Mr Justice Sullivan announced that he rejected "GNER's discrimination and state aid grounds of challenge".

Franchise payments

GNER had said it paid more to access the track than Grand Central and had sought a declaration that the "charging scheme" was unlawful.

Today's decision is truly extraordinary Bob MacKenzie, chief executive of GNER-owner Sea Containers

The ORR decision at the centre of the court ruling was to grant two train operating companies - Hull Trains Company Ltd and Grand Central - the right to run "open access" passenger services on the East Coast Main Line.

GNER, which has a franchise agreement to run intercity trains on the East Coast Main Line, had also argued that the ORR decision amounted to "an unlawful grant of state aid" in favour of the two other companies.

As franchise rail operator, GNER has to make three payments to gain access to the tracks: a fixed charge, a variable charge, and a franchise premium of �1.3bn over 10 years.

'Preparations continue'

In March, Grand Central won the right to run three direct trains a day between Sunderland and London.

But GNER, which last year beat off three competitors for the East Coast Main Line franchise, had stressed that the case was against the ORR and not against Grand Central.

We are pleased that our decision has been upheld ORR chairman Chris Bolt

Bob MacKenzie, president and chief executive of Sea Containers, the parent company of GNER, said: "Today's decision is truly extraordinary. It has serious commercial consequences for GNER and for the Department for Transport.

"It undermines the profitability of GNER, which already operates to modest margins, and devalues a recently-awarded public contract agreed with government."

But ORR chairman Chris Bolt said: "We are pleased that our decision has been upheld.

"It means that Grand Central can continue with its preparations to run new services between London and Sunderland, and Hull Trains can continue to run its additional service between London and Hull."