The cheapest tickets bought online are being permanently reduced by 11 per cent, bringing London return fares down to £22.30 from Edinburgh, £24 from Glasgow, and £25.80 from Aberdeen and Inverness. Virgin's cheapest Glasgow-London return is £35.

The move comes only weeks after GNER admitted passenger revenue was growing at one third the rate it planned. The operator said it had been hit by last year's London bombings, soaring electricity costs and higher-than-expected payments to Network Rail for track use.

GNER is also seeking to renegotiate its contract because it claims a rival firm that will operate on part of the east coast main line threatens its ability to pay back £1.3 billion for its ten-year franchise.

GNER said its new lowest fares were six times cheaper than in 1975, when an Edinburgh-London single was £11.89 - equal to £69.20 today.

A spokesman said: "We have challenging targets that have to be met, and this is one of the ways we can stimulate passengers to switch from other modes of transport."

He said improvements to the firm's website had been made since Chris Garnett, GNER's then chief executive, admitted to MPs in November it was losing business to airlines because passengers were "fed up" trying to find its cheapest fares online.