Rail company bosses said they were "delighted" despite losing out on a lucrative 20-year franchise to run train services in the south.

Govia was told yesterday by the Strategic Rail Authority (SRA) it would only be allowed to run South Central up to 2009 or 2010 because the company could not make a "value for money case" to carry on beyond that.

South Central operates services connecting London to stations across Sussex.

Despite losing the deal, a spokesman for Govia said it was good news for the company.

Martin Walter, communications director for Govia which is the holding company for both Thameslink and South Central, said: "We are delighted at this outcome as we now know where we are going.

"It means we will be able to plan for the future knowing the finance from the SRA is available.

"A 20 year contract left things up in the air as we were going a bit into the unknown.

"We originally said we wanted a 20 year franchise because of the time we thought it would take to get the infrastructure sorted out.

"When we said we wanted a 20 year contract the SRA was operating under a different system.

"We can now say to staff, 'This is what we are doing for the next seven years', rather than things being left up in the air. We are very pleased with this outcome."

While Govia bosses are happy to lose out, passenger and rail user groups are not, fearing they may be denied improvements promised by the company.

Gina Field, correspondence secretary of the Hassocks Amenities Association, has campaigned for improved disabled access at the station for two years.

She said: "They will cut out Hassocks station completely. When South Central ran the franchise they said they would rebuild the station.

"When Govia took over they told us we had never been promised anything but they would make improvements.

"Some of them have been done. They have improved the signage and lighting.

"The whole thing is a nightmare."

In July we reported passengers' disgust at a U-turn made by the company after it decided not to electrify the lines between Ashford and Hastings and the Uckfield line.

SRA chairman Richard Bowker assured passengers that all the planned improvements, including major track upgrades on the main line to Brighton and the Arun Valley line in Sussex, would go ahead.