FirstGroup is objecting to the new transport secretary’s plans to exclude private train companies from the renationalised rail network.

The Aberdeen-based company operates services through open access licences which grant the private sector the right to fill gaps in the timetable. They are seen as a valuable service for otherwise poorly served locations and are often cheaper.

Operators take all the investment risk but also all of the profits, competing with those companies contracted by the Department for Transport which provides subsidies.

FirstGroup runs runs Lumo, a budget rail service between London and Edinburgh on the east coast main line. It has taken over the route between London and Carmarthen in Wales through the acquisition of Grand Union Trains and plans to launch additional services between London and Stirling, London and Devon and to Manchester. Sir Richard Branson, who ran Virgin Trains, is also keen to enter the market.

However, Transport Secretary Heidi Alexander, who will steer the creation of Great British Railways, has indicated to the rail regulator that she does not favour granting more open access licences as she believes they are denying revenue from a nationalised railway.

In a letter to Declan Collier, chairman of the Office of Rail and Road, Ms Alexander admitted open access operators had successfully opened up new markets, driven innovation and provided choice for passengers.

But she adds: “There is a balance to be struck to ensure the benefits provided by open access operators outweigh the impacts they have on taxpayers and the ability to operate the network efficiently … such as the level of revenue they can abstract from contracted services and the associated implications for taxpayers.”

She said new open access services would put “additional pressures … on already constrained network capacity.

“I wish to see the impacts on the taxpayer and … potential congestion on the network given primacy when considering open access applications.”

FirstGroup chief executive Graham Sutherland last month said: “Growing our open access rail portfolio is a key priority for FirstGroup.

Steve Montgomery, managing director of FirstGroup’s rail services, argues that data demonstrates that open access grows the railway overall.

“By offering competitive fares at alternative times and stopping at under-served destinations, open access inspires more people to use trains rather than cars and planes,” he said.