THE government’s decision to block Stagecoach from bidding for three separate rail franchises due to a row over pensions was lawful, the High Court ruled today.

The rail operator sued the Department for Transport (DfT) for disqualifying it from bidding for the East Midlands, West Coast and South Eastern franchises for refusing to accept the risk of pensions liabilities proposed by the government.

Arriva also brought legal action against the government for disqualifying it from bidding for the East Midlands franchise, but reached a confidential settlement just before the start of a trial in January.