The eastern leg of HS2 will be all-but-axed over catastrophic costs – making a mockery of Boris Johnson’s “levelling up” promise.
It is understood that plans for the high speed rail route, connecting Birmingham with Nottingham, Sheffield and Leeds, are set to be mothballed imminently.
HS2’s costs have ballooned from £32.7billion when the project was approved in 2012 to £107.7bn.
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Treasury chiefs reckon halting the Eastern leg – due to open by 2033 – will save £40bn, which was not included in the total costing.
A Whitehall source said: “They might make some announcement about doing the work in the future but everyone involved in this knows the truth.
“They have run out of cash. There’s no way we’re going to see this built in our lifetimes.”
The source added: “It shows exactly how serious the Tories have been about levelling up all along.”
Work on the eastern leg – known as Phase 2b – was quietly halted last month by ministers in the face of rocketing costs.
Critics say that booting the eastern route into touch undermines Boris Johnson’s election pledge to “level up” the entire economy.
Leeds has already started work on a £500million station to serve HS2, with other projects in the city relying on it.
Labour’s Shadow Transport Secretary Jim McMahon said: “It’s the same old story from this Government – all talk and zero action. It’s little wonder communities feel abandoned.
“Our regions deserve to have the promises that have been made to them kept, but all the Conservatives offer is jam tomorrow.” It is thought that a formal announcement to knock back the scheme will be contained in the impending Integrated Rail Plan.
The much-delayed report, which will also reveal the Government’s intentions for Northern Powerhouse Rail and the Midlands Rail Hub, was due back in January.
The Department for Transport insisted “no decisions” had been finalised on the delivery of the route.
A spokesman said: “The Integrated Rail Plan will soon outline exactly how major rail projects, including HS2 phase 2b and other transformational projects such as Northern Powerhouse Rail, will work together to deliver the reliable train services that passengers across the North and Midlands need and deserve.”
Construction on the western leg of HS2 – from Birmingham to Manchester is set to continue despite being some £30bn over budget.
The first phase of HS2 linking London to Birmingham is pressing ahead, with costs spiralling to roughly £70bn.
It could be 2028 before the first trains run.