Scottish rail giants Stagecoach and FirstGroup will battle it out as the only two companies invited to tender for a new South Western franchise.

The territory generates 14 per cent of all UK passenger journey and has been the flagship of the Stagecoach rail business since it was first awarded the franchise 20 years ago.

Despite the success of European state-owned operators such as Abellio in wresting much of the network from UK companies,the only challenger to Stagecoach’s incumbent South West Trains is FirstGroup. The two companies have since 2013 fought over two of the network’s biggest franchises, west coast and east coast, with Stagecoach-powered Virgin Rail winning on both fronts.

FirstGroup, after a string of failed bids in the past two years, last month landed a renewal of its Trans-Pennine franchise.

The invitation to tender will be published in the next few months and the franchise begin next year.

Stagecoach’s chief executive Martin Griffiths said continuity of one operator over the past 20 years had been a key to success. “The next franchise requires a transport operator which fully understands this complex network, grasps the massive challenges ahead, and has a track-record of delivery and working effectively with industry partners.”

Steve Montgomery, First Rail managing director and formerly boss at ScotRail, said: “We have extensive experience of running commuter, inter-urban, regional and long distance services... and a strong track record.....we are developing an innovative and value for money proposal that will deliver better connectivity and significant improvements for customers.”