Government withdraws backing after failing to get assurances from local councils that additional costs would be covered.
The government has axed a £300m tram project in Liverpool because it could not get funding assurances from the five councils backing the scheme.
In a statement transport minister Derek Twigg said that £170m of government backing was available for Merseytram“ as long as we could be sure that the scheme would be delivered without any further requests for government funding”.
He said: “We asked for assurances from the districts, as the ultimate funders of any overruns, that they would cover any additional costs. Unfortunately the required assurances have not been coming. I have therefore decided that this scheme cannot proceed.”
The plan involved the construction of an 18km tramline between Kirkby to the north east of Liverpool and the city centre.
Laing O’Rourke won the contract to build the scheme in March and enabling works were already underway.
Transport operator Merseytravel is set to release a full statement later.
