RAIL passengers will be refunded half their fare in cash if they have to stand on long journeys under plans for a new train service which could prompt a price war on routes between London and northern England.

The refunds will be paid even if seats become available later in the journey.

Grand Central Railway, which is bidding to run direct trains between King’s Cross and 12 towns and cities in Yorkshire and the North East, also plans to revive British Rail’s policy of offering reasonably priced tickets on the day of travel.

Since privatisation, train companies such as GNER and Virgin have pushed up the cost of walk-on fares and passengers have to book well in advance to get cheap deals.

Passengers often find no cheap seats are available for the times that they want to travel, even if they book weeks in advance.

People buying a ticket on the day they travel have to purchase a standard open return if they need to travel at peak times. Train companies have stretched the definition of the “peak” to cover several hours in the morning and evening.

The standard open return between between London and Sunderland is £200. Grand Central plans to offer single tickets for the same peak journey for only £35 and returns for £60.

The company will not offer the same heavily discounted fares as other operators because it believes that these are misleading and lead to frustration among passengers who cannot obtain them.

Rather than advertising only the cheapest deals, Grand Central will publicise the fare that will be available to all passengers at any time, leaving people in no doubt as to how much they will pay.

Ian Yeowart, managing director of Grand Central, said: “We will be advertising the most expensive fare, which will be reasonably priced and open to all.

“The cheap deals currently advertised may sound good but can be hard to find.”

He said guards would walk down the trains and pay refunds to any passengers who had been unable to find a seat.

“If staff run out of cash on the train, you won’t have to write to us. We will write to you with the refund.

Times recommends

• 21 weekend breaks for September
• French kissing in the Lozère
• Timbuktu by motorbike Pt 5: into Mali