Coalition Transport Secretary Patrick McLoughlin has been forced into the public relations nightmare of conceding that the initial decision to award FirstGroup the franchise was based on "serious flaws in the procurement process."

Neat timing indeed, as a High Court appeal by Virgin Trains against the franchise competition was due to begin tomorrow. Unfortunately, for the Government too, the announcement came slap-bang in the middle of the Labour party political conference which has further stoked the PR machine. Pure coincidence? The cynical PR man in me thinks not.

And the newspapers are full of it. Even the ever-loyal Daily Mail calls the volte face "arguably the biggest and most embarrassing shambles on Britain’s railways since the collapse of Railtrack more than a decade ago."

It’s obvious that Virgin Trains public relations machine has been operating at full throttle from the moment the Government made the decision to strip Virgin Trains of the London to Glasgow railway, preferring FirstGroup's £5.5bn bid to Virgin Trains' offer - which was £700m less. Nothing less than winning the hearts and minds of the British people would do. A lobbying and media relations blitz ensued, with a few key plays underpinning the action.

An online petition was the first move, protesting the Government's choice, and it soon collected in excess of 100,000 signatures as Richard Branson lined up an impressive roster of media-friendly celeb supporters.

But Virgin Trains has been particularly smart in understanding the political ramifications of the process, and got Labour on board early on, preying on its post-Clause IV natural inclination to state intervention and committee-forming at the drop of a hat. Sure enough, shadow transport secretary Maria Eagle urged the government to delay its decision, made during the parliamentary recess, saying that the Commons should have the chance to scrutinise the bidding process.

Richard Branson even upped the ante by offering to run the rail link on a not-for-profit basis for as long as it took for Parliament to make a decision. `Cherriddy` that he clearly does like to talk about.

Finally, Virgin Trains moved for a judicial review in late August, a process that resulted in the Government announcing that the FirstGroup's bid was fundamentally unsound, a bid that Virgin Trains, ever on-message, had described it as a "recipe for bankruptcy" from the beginning.

MIliband must think it’s his birthday. Having harangued the Coalition yesterday with "Have you ever seen a more incompetent, hopeless, out of touch, U-turning, pledge breaking, make-it-up-as-you-go-along, back-of-the-envelope, miserable shower?" he was immediately vindicated as Branson delivered him the perfect follow-up.

Now we are faced with a ridiculous situation, and for the current administration potentially damaging state of affairs, where the Government will pass on the running of the service after 9 December to the state-owned company, Directly Operated Railways. Not only that, it has now cancelled all other franchise competitions - for the Great Western, Essex Thameside and Thameslink operations - pending two independent reviews that McLoughlin has now set up.

Richard Branson, of course, can hardly contain himself. Last night he said he hoped the government would let him continue to run the line: "I am pleased to say that the DofT has looked at all of the facts and found significant flaws in the way its officials handled the process. They have basically acknowledged that what we had been saying is correct."

Left-leaning Observer columnist Nick Cohen chimed in, recognising Branson’s triumph, and tweeted: “It takes a Government of unique incompetence to turn Richard Branson from a parasitical state capitalist into a hero of the resistance.” Cue Che Guevara posters with Richard Branson’s face superimposed on that of the Argentinian revolutionary installed at all stations on the route.

In all of this, questions need to be asked about the political class and their almost uniform lack of business experience pitted against one of Britain’s finest capitalists. One who, from the very beginning of his business career, has clearly understood how to use public relations to align communities of interest around a single issue.

There is of course, a bit of 'careful what you wish for' around all of this. Branson will have fuelled another round of the pro-nationalisation debate, which could result in a pyrrhic victory out of the PR triumph. But don’t get me started on the debate about whether the railways should be re-nationalised. I’m old enough to remember British Rail. It was utter rubbish, clapped out anachronism, with about as much attention paid to customer service as a 1930s Soviet Politburo meeting. Since privatisation and the introduction of franchises, the railways have improved in - nearly - every way and passenger numbers have shot up accordingly, despite the ineptitude of clueless politicians and their spineless lackeys.

I say nearly, as all of this for me leaves just one question. Which company is the most likely to do anything about the legendary toilet stink that pervades the Pendolino carriages of the West Coast Main line on every journey?