Plans for the redevelopment of Birmingham New Street station have been sent back to the drawing board over cost fears.

Ministers have told the team behind the £550m Gateway scheme, designed by John McAslan + Partners, to come up with cheaper proposals.

A meeting was to be held yesterday, after Building went to press, at which it was expected that ministers would be presented with some options.

Last week the New Street station team was awarded £128m by the Department for Transport (DfT) but was warned that two further grants totalling £223m might not be forthcoming. The DfT said the £128m could be used to fund a “standalone” scheme.

It is understood the DfT is unwilling to pay for the regeneration aspect of the Gateway scheme, including the revamp of a shopping centre.