THE Government has admitted it may not sign off on part of a multi-billion pound contract which would bring train building back to the region, it was reported on Sunday.

Hitachi has already received a £4.5bn order to supply 596 carriages to the Department of Transport for the Intercity Express Programme (IEP).

The units will be assembled at a purpose-built factory at Newton Aycliffe, County Durham, in a move which could create more than 700 jobs directly and many more in the supply chain.

The Japanese manufacturer also secured an option for a further 270 vehicles to run on the East Coast Main Line and replace the InterCity 225 trains.

However, the Financial Times reported last night that the Government may now look at other options to fulfill the extra requirement.

Simon Burns, the UK rail minister, said the Government remained “committed to providing a modern intercity train fleet for the East Coast Main Line.”

However, he warned that “as part of our commitment to secure the best deal for passengers and taxpayers, we are also looking at a range of options to modernise the rest of east coast’s existing fleet”.

One proposal being put forward by Eversholt Rail, a rolling stock leasing company owned by a consortium of private equity groups, is for the company to invest £120m to refurbish the existing fleet and lease it at a third of the cost of the IEPs.

Alistair Dormer, chief executive of Hitachi’s European rail business, admitted that the IEP would be more expensive to lease or buy than refurbishing existing trains.

However, he said new trains had other advantages, such as reliability.