Corbyn put out a video of him sitting on a train floor last week, arguing that over-crowding was a further illustration of the need for the nationalisation of the train network.
However, Virgin hit back yesterday, providing CCTV images to show that Corbyn had been able to secure a seat on the service, and Virgin founder Richard Branson personally joined by tweeting some of the images.
But Corbyn this morning sought to close down questions over the matter in a tense press conference at which he had sought to discuss NHS policies.
The Labour leader initially refused to talk about the furore before relenting, saying: “I am very pleased that Richard Branson has been able to break off from his holiday to take this issue seriously and with the importance it obviously deserves.
"I hope he is very well aware of our policy, which is that train operating companies should become part of the public realm, not the private sector."
Corbyn's team had earlier sought to defuse the row by arguing that Corbyn had not initially been able to secure a seat while travelling to Newcastle for a Labour hustings, as he had wanted to sit with his wife.
However, the Labour leader admitted that he had later been seated by staff from Virgin, approximately 40 minutes into the two hour journey, after he had already recorded a video bemoaning services on British railways.
It comes as the Information Commissioner's Office confirmed that it was making enquiries over the release of the CCTV images by Virgin Trains.
“All organisations have an obligation to comply with the Data Protection Act and must have legitimate grounds for processing the personal data they hold,” an ICO spokesperson said.
“Where there’s a suggestion that this hasn’t happened, the ICO has the power to investigate and can take enforcement action if necessary.”