The new franchise will run from May

The companies scrapped a bid with the German company Deutsche Bahn in July, citing problems in concluding the framework of the three-way venture.

Stagecoach and Virgin already jointly operate the West Coast and CrossCountry franchises.

The new franchise - to run from May 2005 - will last between seven and 10 years, depending on performance.

The companies said that the Strategic Rail Authority confirmed the new bid met pre-qualification tender requirements for the InterCity East Coast franchise.

'Strong bid'

Brian Souter, Stagecoach chief executive, said: "With our partners Virgin, we have extensive experience of operating inter-city services and we are both committed to putting passengers at the heart of our business."

Virgin Group chairman Sir Richard Branson added: "We believe our track-record of investing in new trains and focusing closely on delivering a first-class operating performance will enable us to work together to develop a strong bid for the InterCity East Coast franchise."

The new franchise involves providing services between London, parts of East Anglia, the East Midlands, Yorkshire, Humberside, the North East and Scotland along the east coast main line and other routes.