Treasury denies Byers' £2.2bn claim

Stephen Byers stood accused today of misleading the voters in yet another botched spin operation after he claimed to have won an extra £2.2 billion for the railways.

The rug was pulled from under the Transport Secretary's feet not by the Tories, but by the Treasury.

In an extraordinary move, they flatly denied the declaration from the Transport Department that Mr Byers had wrung the extra cash from Gordon Brown in talks at the weekend.

Instead, they said that the total, including the extra £2 billion, had been settled back in April last year.

The public row between two Whitehall departments deepened the trouble for the Transport Secretary, already under heavy pressure over the figures, amid charges of confusion and double-counting of cash available from the public and private sectors.

But the Treasury also appeared to be changing its story. When Mr Byers made his announcement yesterday, the Chancellor's officials agreed that it was indeed new money. They said then that the cash was an advance on the allocation destined for the Transport Department in the spending review for the next three years due this summer.

By last night, however, Treasury officials had changed their tune and were at pains today to stress that no concession had been made.

The Tories were quick to move in. Shadow chancellor Michael Howard called the affair "an absolutely appalling muddle".

The disputes and doubts over the figures would, Mr Howard said, diminish yet further the confidence of the private sector, which the Government was asking for help in investing billions to give the railways a future. The affair, Mr Howard added, would also "destroy any remaining confidence" in Mr Byers.

The clash between the Treasury and the department threatens to have a wider impact. Mr Brown and Treasury Chief Secretary Andrew Smith are braced for demands from the spending ministers as the threeyear review deadline approaches.

The last thing they want is any suggestion they are ready to be "soft" on ministers in trouble.