The northern leg of the HS2 line is set to be scrapped, Sky News understands.
Rumours had been circling for weeks that the high-speed rail line between Birmingham and Manchester was going to be axed by the prime minister and chancellor due to soaring costs.
Even the reports – which have been denied by Number 10 – led to a huge backlash from all sides of the political spectrum, including from former Conservative prime ministers Boris Johnson and Theresa May.
A Downing Street spokesperson said: “These reports are incorrect. No final decisions have been taken on Phase 2 of HS2.”
The development threatens to attract controversy and overshadow Rishi Sunak’s first Tory conference as leader and prime minister as the party faithful gathers in Manchester for the annual event.
The first indications that the leg to Manchester could be scrapped came after the Independent reported that ministers were considering shelving the northern phase amid concerns about spiralling costs and severe delays.
The newspaper said a cost estimate revealed that the government has already spent £2.3bn on stage two of the railway from Birmingham to Manchester, but that ditching the northern phase could save up to £34bn.
Sky News understands the Department of Transport (DfT) has worked up a package of alternative projects – rail, bus and road schemes – which could be funded from money saved by scrapping the Manchester to Birmingham leg of the project.
But Andy Burnham, the Labour mayor of Greater Manchester, accused the government of treating people in the north of England as “second-class citizens” with regards to HS2.
He told Sky News’s Sunday Morning With Trevor Phillips: “An east-west line is really important for north of England, as well as north-south. Why is it always that people here are forced to choose? That we can’t have everything, ‘you can have this or you can have that but you can’t have everything’?
“London never has to choose between a north-south line and an east-west line and good public transport within the city.
“Why is it that people in the north are always forced to choose, why are we always treated as second-class citizens when it comes to transport?”
He was joined in his criticism by Mr Johnson, who said delaying or scrapping the northern leg of HS2 would be “betraying the north of the country and the whole agenda of levelling up”.
The ex-prime minister’s intervention came on on the eve of the party conference.
But writing in his weekly Daily Mail column, Mr Johnson appealed to his former chancellor to show Britain still has “the requisite guts and ambition” to invest in infrastructure and labelled the aim of saving money “deluded”.
Mr Johnson – who made levelling up a centrepiece of his 2019 manifesto and government – said when he heard reports the northern leg was set to be delayed or cancelled, he let out a “long, low despairing groan”.
He wrote: “Cancel HS2? Cut off the northern legs? We must be out of our minds.”
Delivery of the high-speed railway has been a core pledge of the Conservative government, but it has been plagued by delays and ever-increasing costs.
The initial opening date of 2026 has fallen back to 2033, while cost estimates have spiralled from about £33bn in 2010 to £71bn in 2019 – excluding the final eastern leg from the West Midlands to the East Midlands.
It is not just the northern section of the project that has encountered trouble.There are also doubts about the future of Euston station in London and whether services will terminate there or at Old Oak Common in west London.