We report the results of an optical campaign carried out by the XMM-Newton Survey Science Centre with the specific goal of identifying the brightest X-ray sources in the XMM-Newton Galactic Plane Survey of Hands et al. (2004). In addition to photometric and spectroscopic observations obtained at the ESO-VLT and ESO-3.6m, we used cross-correlations with the 2XMMi, USNO-B1.0, 2MASS and GLIMPSE catalogues to progress the identification process. Active coronae account for 16 of the 30 identified X-ray sources. Many of the identified hard X-ray sources are associated with massive stars emitting at intermediate X-ray luminosities of 10^32-34 erg/s. Among these are a very absorbed likely hyper-luminous star with X-ray/optical spectra and luminosities comparable with those of eta Carina, a new X-ray selected WN8 Wolf-Rayet star, a new Be/X-ray star belonging to the growing class of Gamma-Cas analogs and a possible supergiant X-ray binary of the kind discovered recently by INTEGRAL. One of the sources, XGPS-25 has a counterpart which exhibits HeII 4686 and Bowen CIII-NIII emission lines suggesting a quiescent or X-ray shielded Low Mass X-ray Binary, although its properties might also be consistent with a rare kind of cataclysmic variable (CV). We also report the discovery of three new CVs, one of which is a likely magnetic system. The soft (0.4-2.0 keV) band LogN-LogS curve is completely dominated by active stars in the flux range of 1x10^-13 to 1x10^-14 erg/cm2/s. In total, we are able to identify a large fraction of the hard (2-10 keV) X-ray sources in the flux range of 1x10^-12 to 1x10^-13 erg/cm2/s with Galactic objects at a rate consistent with that expected for the Galactic contribution only. (abridged)
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