'PPP bidders forced to cut costs'

The Treasury is embroiled in a new row over the proposed part-privatisation of the Tube today following accusations that bidders were pressurised to cut costs.

Michael Cassidy, chairman of the consortium Linc, which failed to take over large sections of the Tube, said the Treasury repeatedly changed the PPP rules during bidding for the 30-year contracts.

He told the Commons transport committee that his consortium had to delay plans for new trains because of Treasury intervention. Tom Brake, Liberal Democrat spokesman for transport, has now tabled the first of a series of Parliamentary questions about "the Treasury's involvement". He said today: "We always knew the Treasury and Gordon Brown were pulling the PPP strings. This has now been confirmed." The Transport Department denies such interference.

Meanwhile, Tube chiefs estimate gross operating margin will fall from a £73 million profit to £122 million loss, sparking new fears about PPP funding.