Bidders for the £13bn London Underground part–privatisation are calling for money-back clauses to safeguard them if mayor Ken Livingstone is given more control.
The call comes amid renewed speculation that the government is rethinking the public-private partnership scheme and is preparing to accede to some of Livingstone's demands.

A source at one bidder said the consortiums were in talks with London Underground over "underpinning" bids, so bidders would be compensated if the contracts were terminated by the mayor before completion. The source said funders were pushing for a minimum clawback of 90% of money invested.

The source said a clause of this kind was required because the client was Transport for London. He said: "The risk is that if their investment is not underpinned, the banks would be left with no reparation."

The source added that the decision to ask for such a clause in contracts was partly a response to concerns in the City in the wake of the collapse of Railtrack last October.

The risk is that the banks would be left with no reparation

Source at London Underground bidder

The source said: "The precedent of Railtrack has meant that some banks will not take risks without some certainty they will get their money back."

The consortiums selected for the three sets of underground lines (Metronet and Tube Lines) said this week that they were confident they would pass value-for-money tests inserted into the contracts.

Final bids from the two consortiums were lodged with London Underground last Friday.