In March 1947, the LMS announced its intention to operate mainline passenger services using diesel traction: initial specifications were for a pair of 1,600 hp locomotives with a top speed of 100 mph, capable of hauling express services such as the Royal Scot The company also announced it intended to use the same type singly on semi-fast suburban and medium weight freight services such as were hauled by 2-6-4T engines; English Electric engines were specified of similar design to that used on the company's diesel-electric shunting locomotives. The LMS signed an agreement with English Electric to construct two 1600 hp locomotives: the mechanical parts were to be constructed at the LMS's Derby Works with George Ivatt responsible as the overall designer; electrical parts and diesel engine were to be supplied by English Electric.

The bogies took an American pattern design, which was modified by Edward Fox and his team at Derby to create a smooth-riding suspension The welded bogie frame was derived from Fox's earlier design for Liverpool-Southport electric trains (later renumbered British Rail Class 502.