Many passengers are seriously disadvantaged by this piece of exploitation

Brendan O'Friel, chairman of passenger watchdog

In its annual report published on Friday, the passenger group will accuse Virgin Trains of exploiting thousands of passengers who use the West Coast line.

The report is expected to demand government legislation restrict future fare increases.

Virgin Trains has seen the report but has ruled out cheaper fares for early morning travellers.

The passenger watchdog's chairman, Brendan O'Friel, told BBC Radio 4's Today programme that the high fare increases were unacceptable.

"We think this is entirely unjustified and many passengers are seriously disadvantaged by this piece of exploitation," he said.

Increases unacceptable

This is the first case of a train company being referred to the regulator for monopoly abuse.

In the last three years the cost of a first-class return ticket between Manchester and London during peak time has risen from �140 to �252, an 80% increase.

"In the last year we have a dreadful time from the trains - one of the worst since the war," said Mr O'Friel.

The passenger group will ask the regulator to investigate and if the case is proven to freeze fares or insist that they be reduced.

"Monopoly exploitation is against the law in this country and Virgin is monopolising its position," he said.

The company says that, together with Railtrack, it has spent billions of pounds on upgrading the West Coast route and has invested heavily in new trains.

The West Coast Main Line links Glasgow with London.

Train upgrades

Virgin already has plans to upgrade the trains on the line by introducing tilting trains by 2003.

The trains could travel at speeds of up to 140mph, cutting a journey between London and Manchester to just over one-and-a-half hours.

Virgin Trains was criticised by passenger groups, politicians and rail unions when rail firms announced fare increases in April.

Virgin Trains' increase of 9.8% was the largest.

The company said it faced insolvency without the price rises and blamed Railtrack for failing to pay adequate compensation for the network disruption caused by the Hatfield tragedy.

Earlier in the year Virgin chief Sir Richard Branson said he would "kick start" a rail recovery by offering half price fares throughout February.