Gateway cost causes London cash shortfall

That was the view of the Thames Gateway London Partnership as the creation of the east London urban development corporation – charged with delivering much of the building – appears to have stalled.

Stephen Joseph, deputy chief executive of the TGLP, said the group had spent six months assessing the cost of the growth.

"Excluding Crossrail, our research currently finds the scheme will cost £18.6bn," he said.

"Accounting for what the government has already committed, and what the private sector has put up, this means additional funding will be required in the order of several billion pounds."

A development director at a leading London registered social landlord said the shortfall didn't surprise him.

"We are starting to get a reality check in terms of what the investment means," he said. "A lot of people will be disappointed."

The TGLP will present the figures to the London Partnership board, chaired by housing minister Keith Hill and London mayor Ken Livingstone. The next meeting takes place on 17 February.

East London councils, the government and the London Development Agency have been unable to resolve arguments over the urban development corporation's boundaries.

Critics say the government's 17 November consultation, which is set to finish on 6 February,drew its boundaries far too tight, missing out many housing estates desperate for regeneration.

Conor McAuley, cabinet member for regeneration at Newham council, said: "They're making the same mistake they made with Docklands, where businesses were drawn in but communities excluded."

An ODPM spokesman refused to comment on the negotiations, but said the UDC was still on course to be established in the summer.