The UK’s first co-operatively owned railway service could begin running trains in the south-west of England late next year.

The Office of Road and Rail (ORR) has approved a bid from open-access operator Go-op to run several new services between Swindon, Taunton and Weston-super-Mare, and compete with Great Western Railway on the line.

Go-op, which is based in Somerset, will be owned and managed by staff and the local community, with all profits invested back into improving the service.

It intends to start its services by December 2025 but has to provide evidence to ORR that it has the finance to begin operations, fund level-crossing enhancements and has secured the necessary rolling stock.

Go-op’s approved bid comes as a number of open-access operators have begun, or successfully applied, to run services alongside the current franchise operators.

Private open-access train providers include Lumo, which is owned by FirstGroup and runs services between London and Edinburgh, and Grand Central, which runs from London to Sunderland and Bradford.

Despite Labour’s plans to bring the major rail franchise contracts into public ownership by 2027, it is still open to bids from open-access operators to run certain services after that point.

The ORR said the “novel proposal” from Go-op would benefit passengers across Somerset and Wiltshire.

The new operator would run return weekday and weekend services between Taunton and Weston-super-Mare, Taunton and Westbury, Taunton and Swindon, and Frome and Westbury.

Alex Lawrie, Go-op’s chair, said: “We’ve been working on this project for over a decade now and it has its origins in a group of frustrated rail passengers in the West Country.

“We noticed that there were plenty of statements, plenty of train tracks but the trains seemed to go straight through our counties, with the connections within Somerset and Wiltshire were actually very poor.

“This is a big breakthrough for us, it’s the point which we can safely say this is going to happen.”

Go-op has proposed to finance its scheme without any public subsidy and will instead use a mix of loans and crowdfunded investment to fund the project.

Members will also have the chance to invest in “community shares”, a form of equity investment that focuses on steady returns.

Go-op will now need to recruit and train about 30 staff before it launches, including 10 new drivers. It has also yet to buy the trains needed to run services on the line.

Martin Jones, the deputy director, access, licensing and international at the ORR, said: “Our decision gives Go-op the opportunity to bring the first co-operatively owned train service and the first regional open-access service in the UK.

“We will closely monitor Go-op’s progress towards meeting the financial and rolling stock requirements that are needed before it can bring the services into operation.”