Funding unlocked for second phase to Clapham Junction after dispute ends betwen local and central government

London and Central government have broken a stalemate on funding the second phase of the East London Line, connecting Surrey Quays and Clapham Junction.

The Department of Transport (Dft) and Transport for London (TfL) have been wrangling over a £30m funding gap for the scheme since last year.

While DfT and TfL had agreed to split the gap, Ministers were understood to be insisting on the inclusion of Surrey Canals Road station in Lewisham. But TfL said upped the price of the project beyond viability.

Pressure had been growing on both the Mayor and the DfT to agree to bankroll the project in time for a seamless transition between it and the first phase, which is due to complete in 2010. The official window for an agreement closed in October.

Speaking to a local paper last month, Valerie Shawcross, London Assembly member for Lambeth and Southwark and also chairwoman of the assembly’s transport committee, said: “This is the biggest transport bargain of the century and would be completely insane not to put it in place because it’s so cheap and will be incredibly useful.”

Phase 1 of the line will run between West Croydon and Crystal Palace.

The funding announcement will be made at a photo call on Clapham Junction Rail Station at 10.30 tomorrow morning.