TRANSPORT authority Merseytravel is holding crisis talks with the Government after Alistair Darling ran its £325 million tram scheme off the rails over increased costs.
The scheme has been in the pipeline for five years and was expected to be given the go-ahead in time for Liverpool's reign as Capital of Culture in 2008. But the £204 million of cash needed by Merseytravel from the Government has proved the central sticking point in building the 11-mile route from Kirkby into the city centre.
The transport secretary told the House of Commons on Monday night: 'I appreciate that Merseytravel has made every effort to keep costs under control.But it is clear that costs remain significantly higher than those I approved and that this scheme is an expensive way of delivering these transport benefits for Merseyside.'
Mr Darling added: 'While I support tram schemes, I cannot do so at any cost. In the light of all the information I have therefore concluded that I cannot approve the proposal for Line 1.'
But Mr Darling's claims have been rubbished by Merseytravel, which accused him of getting his facts wrong.
Its chairman Mark Dowd said: 'Alistair Darling appears to have misunderstood the figures regarding the project. It is impossible to deliver Merseytram Line 1 for £170 million.
'This was the figure we had asked from the Government towards the overall cost in 2002 and which had been agreed in principle.
'Since then the price of steel has increased by more than 40 per cent and construction costs have increased by 20 per cent.We are asking for nothing more than the original £170 million index-linked with inflation, which would amount to £204 million and not a penny more.'
Merseytravel officials headed to the capital on Tuesday in an attempt to change the Government's mind.
Mr Dowd said: 'One of our MPs is convening a meeting with the Prime Minister on my behalf to discuss the matter and I am hopeful of securing a meeting with the Deputy Prime Minister.
'Merseytram is not dead but we will need a comeback akin to that of Liverpool Football Club in the European Cup.'
The preferred contractor, Laing O'Rourke, which hoped to start work on the scheme at the beginning of next month, declined to comment.