Wrangle over cash could delay Crossrail spur by three years

Government departments are arguing over funding for the spur to Abbey Wood, south-east London, which will connect Woolwich, Custom House and the Isle of Dogs to the £16 billion line.

A committee of MPs is to investigate claims that one "solution" being considered is a three-year delay to the spur, which would mean the South-East being cut off from Crossrail until 2020.

The threat came as ministers were warned they faced a backlash from small firms if they were forced to pay over the odds to fund the scheme. Members of the Crossrail Bill committee will question officials tonight and tomorrow to discover how serious the funding crisis is.

A committee source warned: "If they are thinking of a delay, we won't stand for it. Members will be asking questions of Crossrail and officials to get to the bottom of this."

Crossrail was finally given the green light on Friday by Gordon Brown after nearly three decades of planning and is due to open in 2017. Rumours that the Abbey Wood spur was secretly being postponed began over the weekend, with some sources claiming the Treasury was insisting on a delay to save money by shunting more than £1 billion into a future spending round.

The spur is one of the most politically sensitive sections of Crossrail because it will bring tens of thousands of jobs to poorer areas of London. There was a battle over the Government's initial refusal to fund a station at Woolwich, resulting in Labour MPs forcing ministers into a hasty U-turn.

Government sources admit there has been "discussion between departments as to who is paying" - Whitehall code for a blazing row - but say they are confident the line will be built on time.

Chancellor Alistair Darling will unveil in tomorrow's spending review exactly how much he expects London companies to contribute to the rail link.

There are fears he is preparing to impose an additional tax - the so-called supplementary business rate - of as much as 4.5 per cent .

Although businesses organisations are supportive of Crossrail, there are fears that small firms could end up paying a disproportionate amount.

Due to open in 2017, the line will run from Maidenhead, via Heathrow and the City to Canary Wharf and beyond.

The complicated financial package will see central Government contribute £5 billion, the business community £1 billion with the rest coming from fares and the supplementary business rate, which is expected to apply only to firms in Greater London with a rateable value of £50,000 or more.