Sir Richard Branson could lose his West Coast rail franchise this week, with a transport union warning that the switch in ownership could mean higher fares, poorer services and job losses.
The Government is due to announce the winner of the bidding for a new West Coast franchise in the next few days.
It is thought that Sir Richard's company Virgin Trains has lost out to transport giant FirstGroup in the battle to operate the London to Scotland line on which tilting, high-speed Pendolino trains run.
Sir Richard Branson could lose his West Coast rail franchise
The Government announcement comes as the rail industry comes to terms with the need to comply with cost-cutting recommendations made in a Whitehall-commissioned report by Sir Roy McNulty.
The RMT transport union is opposed to the McNulty views and very concerned about the West Coast situation.
RMT general secretary Bob Crow said today: "Whoever wins the West Coast route next week, and all the signs point to FirstGroup, they should be left in no doubt that we will mount a massive industrial, political and public campaign to stop any attacks on our members' jobs and the services that they provide to the travelling public.
"From leaked figures it is clear that this franchise is being let on pure McNulty terms with a gold-plated, 12-year contract linked to massive cuts to jobs and passenger services and huge increases in fares as the winning bidder battles to extract every penny that they can in profit."
He went on: "We will work with MPs and communities along the West Coast route to stop the savage assault on staffing levels and budgets that we expect to be at the core of this new franchise arrangement.
"The new West Coast deal is an exercise in casino franchising that lays bare the whole sordid enterprise which is rail privatisation. Companies promise the earth, jack up fares and slash jobs and services in a drive for profits and if the numbers don't stack up they throw back the keys and expect the public sector to pick up the pieces."
Shadow transport secretary Maria Eagle said: "Passengers are set to lose out no matter which companies win these new longer franchises because ministers have promised successful bidders they can hike fares, cut services and close ticket offices.
"Instead of the strict 1% above inflation cap proposed by Labour, the Government has told train companies they can levy fare rises of 8% above inflation in 2013 and 2014 and 6% above inflation for the rest of the franchise.
"At the same time, winners will be allowed to cut rail services, introduce even more expensive 'super peak' tickets and close ticket offices, meaning passengers will be paying more for less.
"In deciding who should secure these franchises, ministers should be asking themselves three questions on behalf of taxpayers and farepayers.
"First, how will farepayers be protected if the impending capacity crunch means unrealistic promises of revenue payments cannot be delivered through growth?
"Second, how will taxpayers be protected from the consequences of an unrealistic bid leading to a repeat of the East Coast franchise fiasco?
"Third, how have bidders treated not just the letter but the spirit of previous contracts, for example not gaming the system to evade payments to the taxpayer or imposing excessive fare rises on passengers?
"A rail system that allows private train companies to maximise their profits at the expense of passengers in a system that costs taxpayers £4 billion every year is a system that puts the wrong people first. That's why it's absolutely right to be considering all options for reform that would deliver a better deal for taxpayers and farepayers."
Rail Minister Theresa Villiers said: "Labour have admitted that their only transport policy is rail renationalisation with huge costs and massive upheaval for our railways.
"Taxpayers and passengers will want to know how much it would cost them in higher fares and taxes, and businesses will want to know how much it will cost them in lost investment.
"The most effective way to respond to passenger concerns about fare levels is to bring the cost of running the railways down.
"Our reform plans - which the McNulty report has contributed to - aim to deliver £3.5 billion in efficiency savings while continuing to expand services for passengers.
"Savings on that scale will enable us to end above inflation fare rises.
"The Government also is pressing ahead with the biggest programme of rail improvements since the Victorian era to tackle crowding and improve services for passengers. Rail fares make a vital contribution to delivering these improvements.
"We are currently evaluating bids for the Intercity West Coast franchise. All franchise bids are judged on their affordability, deliverability and their value for money for passengers and the taxpayer."