Due to lower than forecast passenger numbers on the inter-capital services, by 1998 LCR was in financial trouble. As part of a new deal with the UK government, in 1998 LCR sub-contracted its share of Eurostar operations, via Eurostar (UK), to InterCapital and Regional Rail (ICRR). As part of its bid ICRR stated that regional Eurostar services could not run without government subsidy, which the Department for Transport was unwilling to provide. The only other bidder to operate the UK share of the Eurostar operation for LCR, Richard Branson's Virgin Rail Group, claimed it was willing to run regional Eurostar services at its own risk, however it subsequently informed the UK government that it too saw them as unviable. As part of its contract LCR was not legally required to start regional Eurostar services and by 1999 it was clear that they would not operate.