The Government's unexpected U-turn on proposals to scrap the Gatwick Express rail service has been broadly welcomed by business leaders in Sussex.

But most doubt the new service, which involves some trains running beyond Gatwick to Brighton, will provide a lasting solution to the county's transport problems.

The non-stop London to Gatwick rail link, used by millions of holidaymakers looked likely to be axed to ease overcrowding on the Brighton main line.

Instead, the Department for Transport (DfT), under pressure from airlines, said the service would be retained as a non-stop route and would keep its 15-minute frequency.

At the busiest times of day the service will also run to Brighton, doubling the number of express trains between Brighton and Victoria.

The decision seems to have appeased business leaders in Brighton and Hove and the Gatwick area who had been at loggerheads over the future of the service.

Jeremy Taylor, chairman of Sussex and East Surrey business association CADIA, which has campaigned to save the rail link, welcomed the outcome of the review.

He said: "The DfT has kept the premium rail service in the country while doing something to keep Brighton and Hove happy as well.

"On the surface it looks great. We will have to wait and see how Southern interprets what it has been told to do but we are delighted."

The Brighton and Hove Economic Partnership had lobbied to axe the Gatwick Express to free up spare capacity on the Brighton main line and reduce overcrowding.

But executive director Tony Mernagh admitted: "It was a position the partnership didn't want to adopt because it accepted that Gatwick needed a dedicated train service if it was to remain a competitive airport for business users as well as holidaymakers.

"The situation really requires more capacity in the form of extra track but, since this was unlikely to happen, we had little choice but to fight Brighton's corner and ask for the existing track capacity to work in our favour. While the arrangement announced by the DfT is not what we asked for, it is a reasonable compromise and the integration of the Gatwick Express franchise with existing Southern services should ensure that the new schedules run smoothly."

Sussex Enterprise chief executive Mark Froud said businesses would be relieved the Gatwick Express was not being scrapped but warned it would not solve underlying problems.

He said: "Extending the Gatwick Express to Brighton is a short-term fix, which looks good on paper but won't work practically. Mixing commuters with air passengers just won't be effective as they have completely different needs.

"Instead of trying to squeeze out more capacity by tampering with the Gatwick Express service the Government should be thinking on a much larger scale and look at radical plans to upgrade the rail infrastructure."

British Airways and Virgin Atlantic welcomed the DfT decision but expressed reservations about mixing holidaymakers with rush hour commuters.