Tube Lines to get £4.46billion for Underground upgrades

The sum is well below the £5.7billion Tube Lines requested for the work it is required to do on the Jubilee, Northern and Piccadilly lines, over the second review period of its contract between mid-2010 and 2017

Mr Bolt has instructed Transport for London to fully fund the works, even though the figure is around £400million more than it says it can afford.

Mayor of London Boris Johnson indicated he may challenge the Arbiter's decision in court, accusing Tube Lines of "daylight robbery".

He said: "We are being asked to write a blank cheque in order to prop up failing Tube Lines. In other countries this would be called looting, here it is called the PPP.

"We will fight this to the last and we are examining all our options, including legal remedies."

Tube Lines' acting chief executive Andrew Cleaves broadly welcomed Mr Bolt's decision, and called on London Underground to work more closely with it to ensure work is carried out more efficiently than during the first review period.

He said: "We consider this decision could present Tube Lines with a significant challenge in its efforts to deliver the investment in the Tube that the system continues to require.

"This will require a step change in the way that Tube Lines and London Underground work together. We will wholeheartedly welcome working more closely with LU to simplify and modernise working practices on the Underground and give Tube passengers more, for less."

Tube Lines attracted criticism from the London Assembly last month for the delays in getting the Jubilee line upgrade finished on time and for not confirming the schedule of weekend closures for the forthcoming work on the Northern line.

But The Wharf understands the Jubilee line work will be complete by the end of May, with the line fully operational by October.

The PPP row is not quite settled yet. There will still be scope for more negotiation between the parties before the Arbiter gives his final directions on financing on April 29.