The deal sees four new directors join Grand Central's board alongside existing managing director and shareholder Ian Yeowart and operations director Sean English. Giles Fearnley takes up the role of chairman, Bob Howells becomes vice-chairman and the two are joined by Philip Moody and Phil Gartside. All four are investors in the restructured company.

Both Fearnley and Howells were founder directors of Prism Rail, the company which operated the WAGN, C2C, Wales & West and Cardiff Valleys train franchises before selling them to National Express in September 2000 for £165.8m. Moody is a corporate financier who worked with Prism during its stock market flotation. The presence of all three on the new Grand Central board will fuel speculation that the company is being primed for a sale to one of Britain's transport plcs within the next few years.

Ian Yeowart, managing director of Grand Central, said: "We are delighted to have secured our continued independence and the management expertise and financial resources that Giles, Bob and their team bring to us. This agreement ensures Grand Central now has the necessary resources to deliver its long-term vision.

"The new team has a formidable track record in successfully developing rail businesses and we very much look forward to working with them. I would also like to thank Fraser Eagle for the invaluable support it has given to Grand Central over the past two years."

Giles Fearnley, chairman of Grand Central, added: "Ian has shown remarkable tenacity in developing the Grand Central project and in overcoming the many obstacles and challenges he has faced in securing a track access contract. We see great potential for developing Grand Central into a major UK train operating company."

In June 2006 Fraser Eagle announced that it had received a number of approaches from parties interested in acquiring Grand Central and was evaluating a potential sale. A spokesman for the company said it would use the money to invest in a recently formed Bus Partnerships division, set up to offer managed bus services for school and community transport using a similar business model to the company's rail replacement bus services.

Grand Central will begin operating three daily services in each direction between Sunderland and London later this year and is seeking to run a fourth service - having already made a timetable request to Network Rail. The company also has long-standing plans to operate direct trains between London and Bradford via Halifax. Detailed negotiations are currently taking place with Network Rail on timetabling issues.

Key personnel required for the launch of services on 20 May have been recruited, with 11 drivers currently undergoing an intensive training programme led by driver standards manager Robin Hicks. The remaining on-train staff are due to join the company later this month.