The simple fact is that the Trains would have been popular as they would have been an extension of the Sheffield services, which means that they cater for loads of different markets, firstly the current London - Sheffield service, but also stealing some Virgin Passengers from the Voyagers on Derby-Chesterfield-Sheffield-Wakefield-Leeds trains.
It would have actually been fairly profitable, well, more profitable than paying leasing costs for trains sitting around doing bugger all.
The official reason is that the line London-Bedford is overcrowded, although the fact that there would be no extra trains running kinda makes that sound silly dont it
.
My guess is that the SRA saw GNER's bid and thaught "Wow, loads of premium is gonna come our way, and it relys on GNER getting more custom Leeds-London, but if MML run Leeds-London too then the market will shink and they wont be paying as much".
So instead of improved connections to Leeds from the East Midlands, we get left with nothing, whilst GNER continue ahead with their crazy Electric Horseshoe, which will be used by mostly HST's, what a great plan :roll: