Rail sources said that GNER, owned by Sea Containers, was given a two-hour ultimatum either to sign the deal or see it snatched away and re-tendered.

GNER signed. But the deal has since gone sour and triggered a potential financial crisis at the company. GNER's problems have added to uncertainty over the future of Sea Containers, the Bermuda-registered transport group founded by tycoon James Sherwood, which is in the middle of a financial restructuring.

The drama unfolded in March last year when, after months of talks, GNER clinched a deal to continue running services between London and Scotland for 10 years. GNER agreed to pay £1.3 billion to the government over the franchise period.

Crucially, the franchise gave Sea Containers indemnity against the emergence of a rival operator, Grand Central Railways, a start-up rail firm that had lodged an application to start services on the line.

The safety net was revealed during a recent High Court case brought by GNER. Adrian Caltieri, planning and development manager, said the Strategic Rail Authority (SRA) had "immediately" offered protection when the question of Grand Central was raised.

"This protection was withdrawn by the SRA on 18 March 2005, just before GNER entered into the franchise agreement," he said.

Sources said transport officials withdrew the offer at a meeting in London, and gave GNER only two hours to sign up or see the franchise taken away. GNER accepted, and Grand Central was later given permission to start services. GNER challenged that decision in court, but lost.

Last night the Department for Transport would not comment on the detail of the negotiations, but said: "The franchise agreement is now in the public domain, and represents the final negotiated form of the agreement."

But GNER backed the claims of rail sources. It had included a competition "caveat" in its bid, which was withdrawn at the last minute, it said. "Obviously, being faced with such an ultimatum at the eleventh hour was a surprise, given the value that had previously been offered," a spokesman said.

"And the threat that the franchise would have to be re-tendered, if we did not sign there and then, put us in an impossible position.

"What is worse is that the verbal assurances that the SRA gave us at the time, that open access would not adversely affect GNER, have now been shown in the High Court to have been no use whatsoever."