Virgin Trains says it has reached an agreement to operate services on the West Coast Main Line for the next 23 months.
It comes after an embarrassing U-turn by the Department for Transport (DfT), which admitted it got its sums wrong after initially awarding the franchise to rival FirstGroup.
Sir Richard Branson, the founder of Virgin, who had described the bidding process as "insane" and mounted a legal challenge to the decision was delighted by today's decision.
He said: "It has been a long journey to get to this point but we won't be resting on our laurels and intend to keep improving services for our loyal customers.
"Our lawyers said we had a less than 10% chance of winning after the Government originally awarded the franchise to FirstGroup. One of the key things we have learned from this episode is to never give up if you think right is on your side.
"This is a perfect early Christmas present for our wonderful Virgin Trains staff and customers. Onwards and upwards in 2013 and beyond."
Transport Secretary Patrick McLoughlin said: "We are determined to ensure not only that passengers continue to experience the same levels of service they have in the past, but that services improve.
"There will be a new hourly service linking Glasgow and London and we will also work with Virgin Trains to explore other service improvements."
Virgin said there will be up to 28,000 more seats each day on the line because of the delivery of 106 new Pendolino carriages.
Its temporary deal will run from December 9 until November 9 2014, after which the West Coast line will be let under a long-term franchise.
DfT will be able to cut the 23-month period short "by up to six months if a subsequent franchise can be let on a shorter timescale", the Government added.
Three DfT officials were suspended after the bidding process was scrapped and Virgin was expected to be given the go-ahead to run the line for between nine and 13 months.
The new deal will see Virgin run the line on a temporary basis for far longer but does not involve an interim franchise as all existing bid processes were suspended pending the findings of an independent inquiry into the franchise system ordered by Mr McLoughlin.
The investigation, led by Centrica chief executive Sam Laidlaw, produced damning initial findings which listed a string of failings by the DfT.
The publication of the full report, expected later on Thursday, was delayed after one of the suspended department officials, Kate Mingay, mounted a legal challenge to her suspension.
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