Scotland's transport policy has done agonisingly little to encourage cycling, so hopefully our pedal protest will be heard

Just over a year ago I was sitting in a remote corner of Scotland watching with a mixture of admiration and envy as cyclists in London took to the streets in a series of flash rides over cycle safety, culminating in the "Big Ride" on parliament just before the mayoral election. It seemed as if cycle campaigning was finally taking off south of the border and cyclists' voices were being heard, while here in Scotland the cycling and walking budget was actually declining despite the government's target of 10% of journeys being undertaken on a bike by 2020.

So when David Brennan, a helmet-camera cyclist in Glasgow better known as Magnatom, tweeted that we should hold a Scottish Big Ride of our own, I jumped at the chance, along with a handful of others, and Pedal on Parliament was born.

None of us had ever organised a demonstration of this scale in our lives, half of us had never even met each other until the day before the first demo, and we were astounded when somehow – through a mixture of determination, tweeting, mass flyering, blogging and countless emails – we managed to assemble 3,000 cyclists on the Meadows in Edinburgh to lobby Scotland's politicians for more investment and better conditions for cyclists of all kinds.

We were delighted to be joined not only by the "lycra brigade" but by hundreds of families, with several kids even completing the ride on balance bikes. The day was both moving and joyful, a carnival of cycling and a serious attempt to show the politicians that investing in cycling wasn't just something for existing cyclists, but for everyone.

Fast forward a few months, and essentially nothing had changed – for all the warm words from our politicians about how we were "pushing on an open door". While the walking and cycling budget had at least stopped declining, it was nowhere near the level that was needed to see real growth in cycling across Scotland.

We were invited to meet the minister for transport, Keith Brown, but although he listened, it didn't translate into any real action. He recently told the BBC that modernising Scotland's transport meant building more motorways, and they've managed to find the money for a programme of road building while cycling has to wait to see if it gets a few crumbs out of "Barnett consequentials" (windfall money from the Westminster budget).

While Westminster's all party cycling group's recent Get Britain Cycling report laid out a realistic roadmap of how mass cycling could be achieved, Scotland is stuck with the Cycling Action Plan for Scotland, a document that is neither a plan nor provides much in the way of any action. Though Scotland's health, pollution and carbon emission reduction policies rely on achieving a growth in bike use, it doesn't seem to have any real idea of how to achieve it, other than yet another campaign urging road users to be nice to each other. Once again, Scotland was getting left behind.

With no leadership coming from the top, we knew we were going to have to supply the political will ourselves. Following the lead of the Dutch and the Danish who took to the streets repeatedly in the 1970s to get their cycle paths, we started planning the next mass demonstration. This time our message was explicit: "we are everyone".

Fuelled by anger over the recent Gary McCourt case (where a motorist was given a community sentence for causing McCourt's death), and buoyed by a promise of attendance from Graeme Obree and support from Sir Chris Hoy, suddenly we had real momentum behind us. Despite monsoon downpours the day before, and the haar (fog) descending on Edinburgh on the morning of the ride, an estimated 4,000 cyclists joined us in the Meadows last Sunday.

Once more the mood was a mixture of sombre – a 21-year-old man was killed on his bike near Inverness just a few days earlier – and joyful. Once more there was a real cross section of people there from roadies in their club kit to those who looked as if they'd only recently disinterred their bike from the shed. For me, though, it was the children who really made the protest powerful. They were everywhere: wobbling along on the cobbles of the Royal Mile on tiny bikes, in child seats, on tagalongs and in trailers, their faces painted, or dressed up, their bikes decorated with balloons and homemade signs.

What will change now? Once more we have a meeting scheduled with Brown, who will be going on a fact-finding mission to the Netherlands. We hope that as a result we'll see the sort of Damascene conversion that has transformed cycling policy in London, although we're not holding our breath.

But what has already changed is the will among cycle campaigners and ordinary cyclists to start asking for real change. We're already getting offers coming in to help with the organising of Pedal on Parliament 3. We will need it. If we've learned anything this year, it's that we're in this for the long haul.

178 flights cancelled during shutdown after Oslo-bound plane turns back shortly after takeoff due to technical fault

Both of Heathrow airport's runways have reopened after a British Airways plane trailing smoke made an emergency landing on Friday morning, leading to a temporary shutdown and the cancellation of almost 200 flights.

The flight, heading to Oslo from Heathrow, returned to the airport shortly after taking off at 8.16am due to a technical fault. Airport officials initially shut both runways but soon reopened the southern strip. The northern runway was reopened at 10.45am.

Witnesses under the flightpath saw flames and smoke coming from the Airbus A319 plane as it came in to land over west London.

One man who was working in a garden in Chelsea when the plane flew overheard said he feared something terrible was about to happen when he saw flames coming from the engine.

"It was very low and horrendous to watch," a man named Jamie told Sky News. "It's the kind of thing you see on Seconds from Disaster.

"There was loads of flames coming from the back of the right engine as it came over us. The noise was like a fighter jet … [The engine] was on full fire when we saw it."

Another witness, named only as Aiden, said he was driving to Heathrow and had to slow down as he was worried debris might fall from the plane.

He told LBC 97.3's Nick Ferrari: "I thought to myself it was just the swirl of the wingtips and then I thought it was just too much for one side and I realised it was smoke. The plane's coming right over the top of my head and I've had it."

Emergency services arrived at the scene and 75 passengers and crew were safely evacuated on emergency slides. Three people were treated for minor injuries, according to the London ambulance service.

London fire brigade said a crew from Heathrow fire station assisted the airport's fire service with an aircraft fire, which had been put out.

A Heathrow spokeswoman said 178 flights had been cancelled as a result of the incident. She added that departures were suffering an average delay of 22 minutes but the disruption to arrivals was within the normal range of about 15 minutes.

British Airways said it was caring for its customers and would be carrying out a full investigation into the incident, which will also be examined by the Air Accidents Investigation Branch.

Captain Mark Searle, chairman of airline pilots' association Balpa, said: "This was a professional job done by professional people. As pilots we spend our whole career training to manage incidents such as this in order to avoid an incident becoming a disaster.

"Balpa representatives will be assisting the pilots involved in this incident and providing whatever support they need. And, as always, we will all learn whatever lessons we can."

There was speculation that the aircraft might have run into a flock of birds, but there was no official confirmation. Bird strikes are a serious problem for aircraft and have been known to bring planes down.

The disruption coincides with the beginning of the busy bank holiday weekend, when tens of thousands of people will travel overseas on short breaks.

1. US Airways jet forced to make ‘belly’ landing at Newark airport
2. Plane with over 130 aboard catches fire on landing at Moscow’s Vnukovo airport (VIDEO)
3. Illegal waste boss jailed after arrest on Heathrow runway

1. Heathrow runways reopen after emergency landing
2. Plane makes belly landing at Newark airport (+video)
3. Plane with over 130 aboard catches fire on landing at Moscow’s Vnukovo airport (VIDEO)

1. High-speed rail disaster rehearsal in Lincolnshire – in pictures
2. How would you cope in a rail disaster?
3. Cause of Connecticut train crash: Debris on the track? (+video)

Emergency teams in Lincolnshire this week simulated a train crash, to test their readiness for a real-life disaster. How did they cope with the panic, chaos and casualties?

The collision occurred at 8.22am. A three-coach train on the east coast mainline hit a trailer being pulled by a tractor. Two of the coaches careered off the tracks, one landing on its side, the other ending up titled at a crazy angle on an embankment. We got there minutes after the impact to see smoke and hear the cries of the passengers in the one carriage still left on the tracks. The passengers in the other two carriages were too traumatised to make much noise.

Until 8.22 it was an ordinary Tuesday morning in rural Lincolnshire. The big sky was slate grey and threatening rain; the rapeseed fields around the crash site swayed in the breeze. The one discordant note was struck by the Classic Cuisine van (hot dogs and burgers £3.80) parked in a field next to the crash site. A couple of hours later the van would be surrounded by hundreds of exhausted emergency staff as they tried to cope with Lincolnshire's biggest ever rail disaster.

Or should that be pseudo-disaster? A train had been derailed, and half an hour after the crash, in a bizarre secondary accident, a lorry looking for a way out of the traffic jam caused by the derailment hit a school, killing and injuring dozens of children and causing a chemical spill that threatened the village ("It's like Casualty," says one observer). But while the police, the fire and ambulance crews, the voluntary agencies, the rescue helicopters that descended on the scene were playing it for real, none of it is real. It's an exercise designed to test how the emergency services would react to a multiple catastrophe.

Lincolnshire takes these exercises very seriously. Every county has to have a disaster plan and to test disaster planning, but most do it using models. Lincolnshire, which two years ago simulated a coastal flood, does it for real – or as real as they can make it. "We have a good track record for realistic exercises," says David Powell, head of the joint emergency management service, who has been planning this week's disaster for nine months. "You test an awful lot more when the blue lights have to turn up, and suddenly they have to talk to each other."

Powell says only a real-time exercise can test the "buggeration" factors – unpredictable elements that no tabletop simulation can anticipate. This one, codenamed Exercise Georgiana (named after a woman killed in a rail disaster in Grantham in 1906), will involve more than a thousand people and last for three days.

The degree of realism is tempered by the fact that all the agencies know what is going to happen and when, though some of the finer details are left sketchy, and Powell reserves the right to introduce "injects", rogue elements he hasn't briefed the participants about. There are also the buggeration factors that no one can anticipate, such as the suspect package found near the school that causes the exercise to be suspended for 10 minutes just in case a real-life explosion is about to occur.

The disaster occurs at a training facility next to RAF Waddington a few miles south of Lincoln – the sort of place where you can crash a train without too many members of the public tweeting about it – but the real site Powell and his planners have in mind is Claypole, a village 15 miles away, which is on the east coast mainline and has a level crossing. The residents have been told their village is about to have disaster visited on it, and many have volunteered to play the part of walking wounded and distressed relatives at a survivor centre that, within a couple of hours of the train crash, will be improvised in the village hall.

The first thing that strikes you at the scene of the crash is how long it takes to get people out of the carriages, even the one that's upright. "There are people dying in here," one of the injured shouts through the window. But still the initial wave of emergency personnel stand around assessing the situation, deciding on a plan of action, establishing priorities. "Health and safety gone mad," wails the Guardian photographer, who looks like he's about to go in alone. He becomes apoplectic when the police start putting tape around the accident scene before getting the injured off the train. I start to fear there could be a real disaster.

Tony Rouse, one of the umpires for the exercise, points out that the power is still on, and the overhead power lines are probably on the ground – any crews trying to effect a rescue would be in danger of electrocution. "If you start losing paramedics, you exacerbate the situation," he says. "It's pointless them being casualties themselves. The whole operation would grind to a halt." He says it could be up to an hour before the casualties are treated. Don't they become hysterical? Surely the people on the train must be baffled by what's going on? "There is conflict," admits Spencer Creek, technical response manager for Lincolnshire fire and rescue, "and that conflict creates problems for responders and casualties. We have to measure the risk, and the risk mustn't outweigh what we're trying to achieve."

Some of the local people who have volunteered to be injured for the day are impressively stroppy about the long delay in providing treatment. "There's a guy in here who can't breathe," shouts one. "Can't one of you blokes who's standing around doing nothing come and help?" Others, though, are less realistic. Staying in character for hours is difficult. Sometimes these exercises are done with trained actors or volunteers who have role-play experience. Powell says that for this exercise they mostly preferred to use local people, including a group of local volunteer first responders, as a way of engaging the community. But I suspect there may also have been cost factors – this is a cheap way of getting bodies – and can't help thinking greater verisimilitude, more hysteria, a greater sense of panic would test the emergency services more.

I feel that even more strongly when I see Georgina Minter playing her role. Minter is one of the dozen or so pros that Lincolnshire has shelled out money on today – all members of Amputees in Action, men and women who have lost limbs and now make themselves available for simulations such as this. They have been made up so their severed limbs look ultra-realistic. Add Minter's Oscar-winning performance as a woman outside the school that has been hit by a lorry – "Where's my baby?" she keeps screaming to a paramedic who looks increasingly shellshocked and who eventually says, "Let's get her out of here, no niceties with this one" – and the test takes on a new dimension. Minter, who four years ago lost both her legs and a hand to necrotising fasciitis, suddenly makes you feel this is more than just a dry run.

"Our role is to rattle the emergency services out of their training mode, put them off a little bit and make them think outside the box," says Karl Ives, Amputees in Action's supervisor for the day: "We want to put a bit of stress on them."

"We're also desensitising them for when it happens for real," adds Lyndsay Adams, an amputee who starred in the Paralympic opening and closing ceremonies and who is today playing the headteacher of the school devastated by the chemical tanker. "They won't have seen it in real life, but this is as real as we can make it."

Dr Peter Holden, a GP who is working here today as a medical incident adviser, has attended three real-life disasters: Hillsborough, the bomb in Tavistock Square on 7/7, and the house explosion in Newark last Sunday. He accepts a test such as this can never quite mimic the real thing – "If this was real, you'd be looking at real blood," he says simply – but reckons the management challenges are the same. "What this does for those who've never really had to do it is make them realise that the first hour is utter chaos, the second hour is organised chaos, and the third hour you begin to go in the right direction."

Holden's role is to prioritise casualties. The paramedics bring them to him with their assessment, and in the space of about 30 seconds he then has to classify them as priority one, two or three. Priority one go straight to hospital; the rest, even those with bloodied faces and broken bones, will have to wait. The people who were getting stroppy on the train two hours ago are now getting stroppy all over again, wondering why they've been parked in a field. A group of boys from Newark College are shivering under blankets after being decontaminated following the chemical spill. One says his nose has been bleeding (in theory, you understand) for two hours. "I'm going to die of a nose bleed," he moans.

"The hard thing for all clinical staff is that in a major incident, you turn everything on its head," explains Holden. "You are doing the most for the most. You can't get stuck in on the first person on the scene. What we've got here is a large number of casualties, many with very serious, life-threatening injuries, who have been stabilised, resuscitated and now have to be shipped out. But we also have all these other people with quite significant injuries who are less serious, and our job there is to stabilise them and feed them into the medical chain so that the medical chain doesn't get indigestion. You will notice that I've ruthlessly kept the walking wounded here. The priority one people will die within minutes, whereas they will take days." You will not die of a nosebleed in two days. The young lad should be fine until at least the weekend.

Over at Claypole, the survivor reception centre is in full swing. The Red Cross is registering the walking wounded and the traumatised as they are brought in and offering first aid. Reassuring women from the Royal Voluntary Service are serving tea and custard creams – the essence of English stiff-upper-lipped fortitude. Local resident Claire Simmonds is playing a woman who believes her elderly parents were on the train and is giving the man from the rail company a hard time over the lack of information she is receiving. Mike Freeman, a volunteer with the Lincolnshire Chaplaincy Scheme, is offering support and trying to keep her calm.

Bang! Mark Bedford, playing a diabetic who was on the train and has lost his insulin, faints, falls off his chair and hits the floor with a resounding thud. If Minter takes the best actress award, Bedford must get best actor. This is one of several identities Bedford was issued with when he reported for volunteer duty. In the morning he had been Mr Disruptive. "We were putting pressure on people really," he says. "It was entertaining. There was a lady from Germany who couldn't speak English. I had the idea of using Google translate to help her."

He says for the most part it worked, but did at one point translate "Where is my brother?" as "Do you need your bathroom repairing?"

Meanwhile, in Lincoln, a strategic command centre has been established in a former nuclear bunker at the county's fire and rescue HQ. There are three levels in the command chain: bronze command – the emergency services on the ground; silver command – a large room at the bunker filled with "cells" dealing with big-picture issues such as logistics, the environment and the media; and gold command, where strategic policy is laid down by 40-plus key people from the 20 or so agencies dealing with the disaster.

I attend the three o'clock meeting, chaired by Chief Inspector Paul Gibson, where they assess how the casualties are being treated, whether Claypole should be evacuated because of the chemical spill, how they will cope with the chaos at local stations (the east coast main line is closed and they are expecting agitated commuters to fight to get on to buses), and when casualty figures should be released. Karen Spencer, the council's strategic communications manager, is desperate to get some figures out – Twitter, like nature, abhors a vacuum and will not be slow to guesstimate figures, she argues – but Gibson is reluctant until they are verified. Their standoff adds a nice moment of drama.

Spencer tells me after the meeting that emergency personnel have to realise the social media revolution has changed the nature of disaster management. "There are so many members of the public with smartphones that people will be tweeting photographs and information immediately," she says. "We are hours and hours late in response. I can only say it so many times. I almost strangled the woman chairing the earlier meeting."

There are tensions between competing parts of the emergency jigsaw: the police are cautious and inherently hierarchical; the council is more used to collective decision-making; its media staff are inclined to be as open as they can in releasing information. Simon Burgess, the council's strategic communications officer, says a key part of the exercise is to highlight these tensions. "No one should be worried about failing," he says. "That's what it's all about – identifying problems. Everything is recorded; everything is minuted; and in the end, in about two weeks' time, we'll be looking at everything – what worked, what didn't work."

By late afternoon, a press statement has been released saying eight people have been killed (I've been tipped off the number of dead will more than double on succeeding days); the police are advising people to "stay calm"; the fire service spokesman clunkily refers to a "protracted ongoing incident". Back at Waddington, the casualties have been freed from the train and the wrecked school, the stroppy walking wounded and the young man with the nosebleed have gone home, and an eerie silence has descended. Two bigwigs from gold command assessing the situation after day one – day two will see the start of the search for the body parts scattered across the site – look content. Given the scale of the catastrophe, it hasn't been a complete disaster.

1. Letters: Hot topic of high-speed rail and airport expansion

The London mayor's most recent claims for his controversial new bus project underline that it has always been a highly political vehicle

This month's mayor's question time was less ratty than most, partly because Boris Johnson kept his OGD - obsessive grandstanding disorder - under fairly tight control. The presence in the City Hall gallery of a Daily Mail sketch writer - for reasons not hard to guess - may have had a restraining effect, though a more likely explanation is that an appearance of statesmanlike sobriety will cut more ice than the usual chortling with ministers at the treasury.

The outcome of the comprehensive spending review is due in just over a month, and fears that the GLA group faces a giant funding chop are rife. Transport grant, in particular, is reported to have been sized up for serious shrinkage. If so it was a little odd that the mayor's main resort to show-off mockery was reserved for a question about the New Bus for London, the transport project his critics are keenest to ascribe to profligacy and vanity.

Liberal Democrat Stephen Knight asked if the New Bus would be clean and green enough to meet the standards Johnson proposes for an ultra low emission zone in central London, which he has promised will be introduced by 2020 - a handy four years (at least) after he's found alternative employment elsewhere. The answer was "unlikely" but discussion of what this said about Johnson's policy judgment was obscured by a smog of "Good Old Boris" filibuster banter about secret Lib Dem labs and cucumbers.

The mayor's defensiveness about the New Bus should be understood in the context of the CSR. His recent excursion to the Wrightbus factory in Ballymena where the vehicle is made had the look of a pre-emptive damage limitation exercise, with much boasting that his investment in the project is boosting economic recovery.

Well, the New Bus is handsome enough, especially on the inside. It is claimed by the mayor to be genuinely cleaner and greener then other hybrids (though the Greens are not so sure) and said to be popular with passengers. But it has cost a great deal more than advertised.

During the five years since he came to power Johnson has said that its development costs (about £11m) would be met by the manufacturer, that other cities in the UK and abroad would be eager to buy it, and that each bus would be priced no higher than existing "hybrid" models. In each case he has been wrong, which hardly helps deflect his critics' barbs and might suggest to number crunchers upstream of City Hall that if Transport for London can find the £200m to add 600 of these luxurious vehicles to the capital's fleet it isn't too hard up to take a hit.

The New Bus for London has always been a vehicle for Brand Boris, going right back to the false impression created during the 2008 election campaign that it would directly replace the bendy buses so eagerly demonised by some of Johnson's most devoted media chums. If it ends up contributing to a reduction in public spending on transport in the capital, one of his most overstuffed political chickens will have come home to roost.

All previous installments of Boris's Bus (A Political Journey) are archived here.

1. HMRC targets 2,000 direct sellers as part of tax dodging crackdown
2. Public has right to know Boris Johnson fathered child during affair, court rules

It was good to read Ian Jack's description of the London Underground as a "great public institution" (What's Ian seen, 18 May). In all the publicity surrounding the 150th anniversary of the tube, hardly a word has been said about another important date: the 80th anniversary of public ownership, inaugurated on 1 July 1933, when the underground became part of the London Passenger Transport Board. This major reform of London's transport had been piloted by Herbert Morrison at a time when many believed that public ownership was both necessary and desirable for many utilities as the market was incapable of delivering good quality transportation in the capital.

The underground had long been a playground for fat cats, as noted by William Morris in 1886, when he denounced the directors of the Metropolitan and District Railway for forcing Londoners on to "the beastly sewers" of the underground. It was only stabilised by Lord Ashfield and Frank Pick, but with lavish government subsidies, in the 1920s. It was certainly not the ideal form of public ownership: there was little public accountability until the Greater London council's takeover in 1968, followed by the dismal years of direct government control from 1984 to 2000. Even then, Gordon Brown attempted to privatise the tube, resulting in the dismal failure of several private companies. Nevertheless, if we are to celebrate 150 years of the tube, let's also celebrate the durable legacy of public ownership, which has provided London with an essential service for 80 years.
Dave Welsh
Author, Underground Writing

• Curious to see that four of the Eurosceptic ministers that you highlight (Bulldog spirit, 20 May) are or were ministers in charge of developing HS2 – Philip Hammond, Theresa Villiers, Justine Greening, Patrick McLoughlin. The EU policy intention is that HS2, as a core European route, will be contracted by and run out of Brussels. Toxic, non?
Madeleine Wahlberg
Leamington Spa, Warwickshire

1. The Tube: An Underground History – TV review
2. Letters: Hot topic of high-speed rail and airport expansion

Train and bus operator turns to shareholders for £615m and scraps final dividend in effort to reduce debts

FirstGroup, the train and bus operator, has turned to shareholders for £615m, scrapped a final dividend and parted company with its chairman in an effort to reduce its debts and avoid a credit rating downgrade.

The shares fell 30% after the cash call was announced alongside a sharp fall in full-year profits at the company which employs 120,000 people.

It is struggling with almost £2bn of debt largely as a result of its acquisition of the US bus company Laidlaw in 2007.

But it came under further pressure last year when the government announced in August that it had won a lucrative contract to run the west coast main line rail franchise between London and Scotland, only to scrap the decision in October citing flaws in the bidding process.

Once the cash call is complete, chairman Martin Gilbert will be stepping down after leading the business for 27 years. He is also chief executive of Aberdeen Asset Management and is thought to have been under pressure from investors.

Gilbert said the fundraising would "not only strengthen the group and support its continued growth but also underpin the ability to remain a dividend-paying stock as well as supporting our investment grade rating".

Tim O'Toole, FirstGroup's chief executive, said the proceeds from the rights issue would provide the flexibility and capital confidence to work on the creation of long-term value for shareholders.

Joe Spooner, an analyst at Jefferies, said: "On first read, FirstGroup's announced £615m rights issue looks due to defensive rather than positive reasons. We believe it should help to shore up the group's investment grade and help avoid the ramifications of potential downgrade.

"The disappointment for us is that nothing materially new appears to be being articulated about the prospects or plans for the group's businesses."

Pre-tax profit at FirstGroup plunged 87% to £37m in the year to the end of March, while revenue rose 3.3% to just under £7bn. The group said a weak economic backdrop in the UK and North America continued to weigh down on its passenger revenue business, as did the impact of reduced UK government subsidies for the bus industry.

It is not paying a final dividend, after paying 16.05p a share a year earlier, nor will it pay out an interim dividend in the current financial year ending March 2014. The shares closed at 155.6p.

Payments would resume with a final dividend in the current financial year, if results were in line with expectations, the company said.

O'Toole said FirstGroup planned to invest around £1.6bn across its five division over the next four years "to underpin growth and return our businesses to our target levels of profitability".

Gilbert meanwhile said it had been an exceptionally challenging period for FirstGroup's rail business following the cancellation of the west coast franchise competition.

"Notwithstanding the public statements from the Department for Transport that we were not at fault, having followed due process and submitted a strong bid in strict accordance with their terms, we were frustrated that our employees and our shareholders had to endure this extraordinary series of events," he said.

The group said it was focusing on the operating performance of its existing rail franchises and was in discussions with the government to extend contracts on its First Great Western and First Capital Connect franchises.

It said it remained committed to retaining a leading position in the UK rail market, "where we can utilise our vast bidding and operational experience to deliver for customers and taxpayers and provide an economic return for shareholders".

1. FirstGroup shares plunge after rights issue and sharp fall in profits
2. ENRC shares slip as it reveals details of spurned takeover attempt

Train and bus operator turns to shareholders for £615m and scraps final dividend in effort to reduce debts

FirstGroup, the train and bus operator, has turned to shareholders for £615m, scrapped a final dividend and parted company with its chairman in an effort to reduce its debts and avoid a credit rating downgrade.

The shares fell 30% after the cash call was announced alongside a sharp fall in full-year profits at the company which employs 120,000 people.

It is struggling with almost £2bn of debt largely as a result of its acquisition of the US bus company Laidlaw in 2007.

But it came under further pressure last year when the government announced in August that it had won a lucrative contract to run the west coast main line rail franchise between London and Scotland, only to scrap the decision in October citing flaws in the bidding process.

Once the cash call is complete, chairman Martin Gilbert will be stepping down after leading the business for 27 years. He is also chief executive of Aberdeen Asset Management and is thought to have been under pressure from investors.

Gilbert said the fundraising would "not only strengthen the group and support its continued growth but also underpin the ability to remain a dividend-paying stock as well as supporting our investment grade rating".

Tim O'Toole, FirstGroup's chief executive, said the proceeds from the rights issue would provide the flexibility and capital confidence to work on the creation of long-term value for shareholders.

Joe Spooner, an analyst at Jefferies, said: "On first read, FirstGroup's announced £615m rights issue looks due to defensive rather than positive reasons. We believe it should help to shore up the group's investment grade and help avoid the ramifications of potential downgrade.

"The disappointment for us is that nothing materially new appears to be being articulated about the prospects or plans for the group's businesses."

Pre-tax profit at FirstGroup plunged 87% to £37m in the year to the end of March, while revenue rose 3.3% to just under £7bn. The group said a weak economic backdrop in the UK and North America continued to weigh down on its passenger revenue business, as did the impact of reduced UK government subsidies for the bus industry.

It is not paying a final dividend, after paying 16.05p a share a year earlier, nor will it pay out an interim dividend in the current financial year ending March 2014. The shares closed at 155.6p.

Payments would resume with a final dividend in the current financial year, if results were in line with expectations, the company said.

O'Toole said FirstGroup planned to invest around £1.6bn across its five division over the next four years "to underpin growth and return our businesses to our target levels of profitability".

Gilbert meanwhile said it had been an exceptionally challenging period for FirstGroup's rail business following the cancellation of the west coast franchise competition.

"Notwithstanding the public statements from the Department for Transport that we were not at fault, having followed due process and submitted a strong bid in strict accordance with their terms, we were frustrated that our employees and our shareholders had to endure this extraordinary series of events," he said.

The group said it was focusing on the operating performance of its existing rail franchises and was in discussions with the government to extend contracts on its First Great Western and First Capital Connect franchises.

It said it remained committed to retaining a leading position in the UK rail market, "where we can utilise our vast bidding and operational experience to deliver for customers and taxpayers and provide an economic return for shareholders".

1. FirstGroup shares plunge after rights issue and sharp fall in profits
2. ENRC shares slip as it reveals details of spurned takeover attempt

The government should kill its absurd rail plan and lay an optical fibre network – it's cheaper and would be the ultimate economic boost

At Google's developer conference in San Francisco, its chief executive Larry Page took part in an impromptu Q&A session. What, one person asked, was the point of the company's rollout of optical fibre networking in places such as Kansas City, where it is offering connections that run at 1,000 megabits per second (at least 10, and generally 100 times faster than the best in the UK) for about $70 per month?

Page's reply: "It's sad that all these computers are connected by such a tiny pipe … things will have to change. Gigabit speeds are just the beginning – connections should go at computer speed."

He's so right. Fast connections just make the entire experience of working online different. You know that yourself: if you were to be taken back now to the world of dial-up, where your connection ran at a maximum of 56 kilobits per second (that's how it was about 10 years ago for most UK internet users, children), you'd feel the pain. Optical fibre means you can have connections that are so quick that you can both download and upload at speeds that let you watch or send HD-quality pictures in real time.

Which is why all the talk of spending billions on the HS2 high-speed rail plan infuriates me. It's such a stupid waste of money, when what we should be doing is building high-speed optical fibre connections across the UK. It would probably cost a little less than HS2, but it would bring far greater benefits both in the short and long term.

Start with the obvious ones. Building HS2 will, it's true, be an economic pump-primer: it'll generate billions in construction. However, so will digging the channels and stringing up the lines needed for optical cable.

But whereas the immediate construction benefit from HS2 will be felt in a very limited corridor (and blight the lives of people who live there), installing optical fibre won't push anyone out of their house, and would produce benefits nationwide.

It would be the ultimate economic boost, but without any of the drawbacks, and with the advantage that most of the economic activity (in terms of people doing physical work) will be in rural areas, which need it more than overserved cities.

What about once it's built? HS2 will good for all those people who live in London and want to visit the provinces before scuttling back at the end of the day. If you think that it will lead to people spending more time in the provinces having travelled "down" from London (because in railway parlance all tracks to London are "up"), here's a reality check: given the choice between staying a night in a regional hotel and getting back on a late high-speed train to the capital, corporate people will choose the latter. Result: more empty hotel rooms in the provinces, not fewer.

Compare that to optical fibre: once everyone has it, or has reasonable access to it, we can all participate in some sort of economic activity all the time. The most surprising thing about optical is the effect that it has once you can upload as fast as you download (so-called "symmetric" connections). It means that your local cricket match can attract thousands of spectators from all over the world. And that's just the start; it also means you don't have to ferry people back and forth on trains or in cars because you can have realistic video conferences on large screens. With energy prices rising, optical fibre uses less energy than copper to get a better result.

But how much will it cost, you ask, and who will pay? In 2008, the cost of wiring up the entire nation with fibre-optic was put at £30bn by the Broadband Stakeholder Group. Since then, BT and Virgin have gone some way to reducing that by rolling out fibre. However, we shouldn't leave it to private enterprise – in part because government rules tax new optical fibre at bizarre rates, while favouring those with an installed base such as BT. That dissuades private industry from laying new optical fibre until it's sure it will have complete take-up. But who's going to sign up for a service that might not be available for a couple of years? More sensible to go with BT's expensive (and perhaps overpriced) offering.

That's why the absurd HS2 project should be killed right away, and any money that the government was going to put into it should be diverted into a national fibre rollout with the aim of giving every household easy access to superfast connectivity, which a range of different providers could vie for. The government can own the network (rather as it does the rail network, through its control of Network Rail) and make it available to commercial players; that would prevent BT getting a tie-up.

Or of course it can ignore this advice. But don't be too surprised if in a few years Google decides that it's going to do the same as it has done in the US, and comes in to build its own network and disrupt the cosy incumbents. That would be the company that government ministers and MPs have been condemning for being "immoral" and "evil". For the government to sit back and let that happen while they splurge money on a retrograde transport scheme that belongs in the Victorian era – well, that would be really evil.

This article was corrected: correct price and comparator for Google Fiber, which isn't $20 per month.

1. Letters: Hot topic of high-speed rail and airport expansion