UPDATE 1-Atkins faces probe for role in West Coast rail fiasco

* Atkins defends advisory role to DfT

* DfT reviewing handling of process for West Coast bids

* Atkins shares down 4 pct

(Adds Atkins statement, DfT comment, background)

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.

Independent reviews into the collapsed West Coast Main Line deal and the Department for Transport's wider rail franchise programme have been ordered by Transport Secretary Patrick McLoughlin. The independent review will likely consider Atkins' advisory role in helping to evaluate bids and provide data.

On Wednesday, the 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.

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.

On Friday, Atkins said it had provided "technical support" for the re-letting of the contract, confirming it had supported the DfT's bid evaluation process and provided technical data for the department's financial risk assessment. It said it had not undertaken an audit role.

"We do not believe there are any issues concerning the quality of the advice that we provided. We believe that we have applied properly assured and technically appropriate approaches in line with the Department's franchise replacement process and our own internal processes," a spokesperson said.

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 3.8 percent to 701.25 pence at 1255 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 on Friday said it would not comment on the independent investigation.

Atkins, which makes around 10 percent of group revenue from rail work acording to analyst Panmure, is working on a number of big UK projects, providing architectural and engineering design services for the London Olympics site and on Crossrail, Europe's biggest civil engineering project.

The group employs almost 18,000 staff globally and has also been working on renovation and repair projects on New York's Statue of Liberty and San Francisco's Alcatraz prison.

Last month the firm said second-quarter trading had been in line with its expectations, with its core UK arm starting the year well and its U.S. division still hampered by weak markets.

($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))