The Department for Transport turned down a franchise extension bid from National Express-owned train operator c2c this week, but in a sudden change of heart has agreed to consider a revised application.

The rejection of c2c's original submission came despite the DfT approaching National Express Group and requesting that c2c apply for the franchise extension.

It is understood that one aspect of c2c's application was that its high class operational record gave the DfT greater certainty of a reliable service to the 2012 Olympics site at Stratford, than if the franchise was in transition after being won by a different operator. The current c2c contract ends in 2011, a year before the Games.

National Express had also hoped that it would be able to gain a three-year extension to 2014 when its neighbouring East Anglia franchise ends, arguing that this could be beneficial to the DfT in franchise remapping. However, the DfT refused to budge from the two-year extension term provided for in c2c's current contract.

"The granting of an extension depends on any proposal demonstrating greater benefits for passengers and taxpayers than those likely to be the case through a competition," the DfT said. "We have, this week, informed c2c that their proposal did not meet this requirement and that the current franchise will not be extended."

However, following two days of negotiation, the DfT agreed that it would allow c2c to submit a revised franchise extension application. Industry sources said that they were not surprised at the DfT's 'on, off,' approach to dealing with the franchise extension. "It's typical DfT," Transit was told. "They ask you to marry them, and the next minute they turn round and say they never even fancied you.