ABERDEEN-based FirstGroup is to take over the running of the West Coast mainline train route, connecting London Euston to Glasgow Central.
The firm said the route would pave the way for an era of high speed rail, and is due to take over in December as part of a consortium with Italian company Trenitalia.
First Trenitalia replaces Virgin Trains, which was barred from bidding to keep the route.
Transport Secretary Grant Shapps said the bid was part of a shift to a new model for rail, but Unions have criticised the move - saying Westminster was taking "yet another gamble".
Mr Shapps said the partnership was supported by Keith Williams, who has been commissioned to look at changes to the rail franchising system and has told the BBC that government involvement should be limited to overall policy and budget decisions.
Virgin Trains has run the route since 1997
"This award is positive news for passengers with more services, more direct connections and ambitious plans for a cleaner, greener railway and also represents a decisive shift towards a new model for rail," Mr Shapps said.
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FirstGroup has been overhauling its business and is seeking a buyer for its Greyhound buses in the US and is looking at spinning off its UK buses arm, First Bus.
Transport Secretary Grant Shapps said: "This award is positive news for passengers, with more services, more direct connections and ambitious plans for a cleaner, greener railway, and also represents a decisive shift towards a new model for rail.
"It is a partnership supported by Keith Williams (chairman of the independent rail review), built with the flexibility to respond to his recommendations and deliver fundamental reform to a flawed system.
"Meeting Keith last week confirmed our shared determination to deliver a future that puts passengers at the heart of the railways, and get our trains to run on time.
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"That is why I have asked Keith to produce his recommendations for a white paper, with fearless proposals that will deliver a railway system fit for the 21st century."
Mick Cash, general secretary of the Rail, Maritime and Transport (RMT) union, said: "The announcement this morning that First Trenitalia are being shunted on to the West Coast Main Line to replace Virgin/Stagecoach in the midst of the rail staff pension row is just another political fix by a Government whose privatised franchise model is collapsing around their ears.
"Instead of following the popular public sector route, the Tories are taking yet another gamble on the crucial West Coast lines with one of the dwindling number of private operator consortia left in the game, in a move that RMT believes is doomed to failure and sure to result in yet more rail chaos.
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"RMT will take whatever action is required to protect out members' pay, jobs, working conditions and pensions on these vital inter-city routes."
Transport Secretary Grant Shapps
A spokesman for Virgin Trains, which has ran trains on the West Coast route since 1997, said: "Virgin Trains has led the industry for 22 years, delivering faster journeys to more destinations, harnessing new technology and always putting the customer first.
"We'll now work with First Trenitalia to ensure a seamless handover for customers, who should still book and travel as normal."
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