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Atkins to face probe for role in West Coast rail fiasco

LONDON, Oct 5 (Reuters) - Design and engineering firm WS Atkins could be next in the firing line for its part in a flawed $9 billion dollar rail deal torn up by Britain's government this week, sending its shares down 4 percent.

British newspaper The Times reported on Friday that Atkins' advisory role into the collapsed West Coast Main Line deal would be part of an independent investigation. The newspaper said it understood the firm had played a key role in evaluating the bids and overseeing revenue forecasts for the Department for Transport.

On Wednesday, the Department for Transport (DfT) said that "completely unacceptable" flaws had been uncovered in its handling of bids to run the line, a jewel in the crown of the rail network linking London and Scotland.

Transport Secretary Patrick McLoughlin said that his department's mistakes would cost the taxpayer at least 40 million pounds ($65 million), a relatively small but politically awkward sum at a time of recession and squeezed household budgets.

Atkins confirmed to Reuters it had provided "technical support" for the contract but would not comment any further on its involvement.

FirstGroup in August won the 13-year deal for the London-to-Scotland line, only for Virgin Trains, a joint venture between high-profile billionaire Richard Branson's Virgin Group and Stagecoach , to challenge the decision and eventually prompt an embarrassing government u-turn.

Shares in Atkins, which have risen 38 percent on a year ago, were down 3.9 percent to 700 pence at 1007 GMT.

"Should any review find Atkins to have been at fault during this tender process, then clearly it could have a negative reputational impact for the group, given this represents a high profile tender," analysts at Espirito Santo said.

The DfT was not able to give an immediate response to The Times article.

($1=0.6186 British pounds)

(Reporting by Neil Maidment; Editing by Mike Nesbit)

((neil.maidment@thomsonreuters.com)(+44 0207 542 2292 Reuters Messaging: neil.maidment.thomsonreuters.com@reuters.net))

Keywords: ATKINS/WESTCOAST