Londoners face Crossrail bill

Londoners could be asked to foot a large part of the £10billion bill for Crossrail under new government plans revealed today.

A study for the Transport Department proposes a rise in council taxes and business rates to help bankroll the massive project to link the east and west of the capital.

The money would be raised as part of a "stakeholder" scheme to fund the Heathrow to Canary Wharf underground route that has been repeatedly delayed by the Government.

Under the plan, passengers, businesses and council taxpayers would be offered a stake in Crossrail to ease pressure on the Treasury-Adrian Montague, the troubleshooter examining the business case for the project, has concluded that London and the South-East should make a " significant contribution" to the cost in order to persuade Chancellor Gordon Brown to give it the goahead.

In an attempt to convince Londoners of the stakeholder idea, Mr Montague suggests that the project's backers be given financial rewards and control over the way the Crossrail company is run.

If the business succeeds, passengers-could get discounted tickets, while businesses and taxpayers may receive financial dividends. Stakeholders could even be offered an equity share in the company.

All three candidates for London Mayor in the June election have vigorously backed Crossrail because of its huge benefits to the city's trade and tourism.

Once built, the line would provide a rapid transit from Heathrow to the Continent via the new King's Cross Eurostar terminal.

Transport Secretary Alistair Darling has expressed his support for the scheme in principle but has yet to take a view on Mr Montague's findings.

A Transport Department spokesman said: " Within Mr Mon --tague's proposals there are a number of imaginative ways in which Crossrail could be funded. The Government is looking at all of them."

The Treasury is only prepared to pay the same amount towards Crossrail that London contributes to the rest of the British economy, thought to be about £2billion. Officials argue that the remainder must come from London's business communities.

London Mayor Ken Livingstone, a staunch supporter of the project, says it would generate £19billion of benefits to the economy.

With the rise in tax revenue likely to be more than £7billion over 30 years, he argues that the Government should contribute "roughly half " of the cost.

The plan is a joint venture between the Strategic Rail Authority and the Mayor's Transport for London body.

It would comprise a new twinbore tunnel through London linking Paddington and Liverpool Street stations with spur routes at either end and a connection to Heathrow.

There is speculation that Treasury officials are also looking at a second scheme, which would use private sector cash to construct the tunnel section only but would not provide new trains or operate the route.

It is believed that the Treasury has delayed giving a green light to the controversial scheme because of fears over the potential cost to taxpayers.