The UK Government has awarded Japan’s Hitachi a £7bn contract to supply up to 1,400 express route carriages.

The decision went against local firms and Canada’s Bombardier, which is currently the only company operating a train factory in the UK.

Britain’s £2bn-a-year rail equipment industry is already suffering from the economic slowdown and the announcement has sparked fierce debate.

The decision to award Hitachi – which does not have production facilities in the UK – hints at the government’s desire to infuse greater competition in the country.