Virgin Trains, which operates the West Coast Main Line in Britain, is bidding for a slice of President Obama's multibillion-dollar upgrade of the American rail network, The Times has learnt.

Virgin is understood to be the only British company involved in the President's plan to build high-speed rail links between key cities on the East and West coasts of the United States. Virgin has been asked to submit a proposal for developing this infrastructure and has held meetings with the new Administration in Washington.

Mr Obama has earmarked $8 billion (£5.6 billion) of the federal stimulus package to develop high-speed rail networks in an attempt to reduce carbon emissions and improve connections between cities. The US has only one high-speed rail link, operated by Amtrak, and its average speed is about half that achieved by the European rail network.

Virgin and other high-speed operators, such as SNCF, of France, are expected to work with the US Department of Transportation to develop its rail plans and then bid to operate individual services.

Virgin is keen on the Los Angeles to San Francisco route and also the East Coast line linking Boston, New York, Philadelphia and Washington. There are 30 return airline flights a day between Los Angeles and San Francisco and a high-speed train service could replace many of those, cutting carbon emissions. The journey would take less than three hours and voters in California have already agreed to raise $10 billion to start work on a line that would run from Sacramento, the state capital, to San Francisco, Los Angeles and San Diego.

Arnold Schwarzenegger, the Governor of California, said this week: “Our rail system in America is so old, we are driving the same speed as we did 100 years ago. We should do what other countries do. All over the world we see high-speed rail. We should do the same in this country, and especially in this state.”

Ray LaHood, the US Transportation Secretary, has said that Mr Obama would like to be known as the “high-speed President” and to improve America's deteriorating rail network.

Another possible high-speed link identified by the US Government is thought to include a service between Los Angeles and Las Vegas.

Moving into America would be Virgin's first venture outside Britain. The company, which is 51 per cent-owned by Stagecoach and 49 per cent by Sir Richard Branson, runs trains between London, Birmingham, Manchester and Glasgow. Virgin was criticised for its poor service when it first won the franchise in 1996, but since the completion of track improvements and the introduction of new trains, it has come to be regarded as a leading operator.

Virgin Trains is considering a potential bid for the East Coast Main Line franchise between London, York, Newcastle and Edinburgh. This service is operated by National Express East Coast, but there are fears that the company has been struggling to meet its payments to the Government.

Sir Richard said: “We want to be sure there are no deals done behind closed doors. The people that bid for this rail franchise knew the risks and, if they overbid, that is their mistake. If they get into difficulty, the franchise should be put up for rebidding.”

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