Government finds extra £500m for the proposal, reports suggest

The government has found £500m to invest in a 1.5-mile tunnel under the Chiltern Hills to head off opposition from councils in the area, reports suggest.

The transport secretary Justine Greening is expected to announce the proposal early next week, as well as a delay in the decision on the £32bn project until mid-January.

The Department for Transport has reportedly found £500m of savings from other parts of the project to construct a tunnel under the Chilterns west of Amersham.

The news comes as ministers were told they could be left with an £8.5bn “black hole” if they continue with the project.

A report commissioned by the 17 councils along the route and seen by the Sunday Telegraph, accuses the government of making a “deeply flawed” and “very weak” economic case for the project.

The report, authored by two leading transport economists, said the benefits of HS2 to the UK economy could be as little as half the £34bn overall cost.