Shadow business secretary John Denham and shadow transport secretary Maria Eagle have written to Prime Minister David Cameron urging him to review the decision.
Maria Eagle told the BBC: "I find it amazing that the Secretary of State is denying that he has the power to make any difference here. He clearly does.
"In fact, the last train contract that was let for intercity trains was reviewed twice by the Labour government towards the end of its time in office and by the new Conservative government - they made significant changes to the contract as a result of their review."
But Ms Eagle told the BBC: "I find it amazing that the Secretary of State is denying that he has the power to make any difference here. He clearly does.
"In fact, the last train contract that was let for intercity trains was reviewed twice by the Labour government towards the end of its time in office and by the new Conservative government - they made significant changes to the contract as a result of their review."
Even Vince Cable is making rumblings "There is a perception that other EU countries appear to manage their public procurement processes with a sharper focus on domestic supply than we have hitherto"
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