London Underground has dismissed fears about the viability of the public-private partnership plan for running the Tube after engineering giant Siemens withdrew from a consortium bidding for the project.

Siemens’ withdrawal from the NewMetro group comes amid mounting concerns among bidders that the government will abandon the funding scheme in the run-up to the London mayoral election.

Taylor Woodrow left NewMetro in November citing “business reasons”. Other companies involved in the consortium, including Mott MacDonald and Gibb, are understood to be looking to join other consortia.

The news comes as LU has increased the compensation on offer to failed bidders from £4m to £15m. A spokesman for LU said: “The government is committed to the success of PPP for LU and there is no lack of confidence in the bidders. The government has also made it clear that PPP will be in position before the mayor takes control of the Underground system.”