Go-ahead for £16bn Crossrail scheme

Gordon Brown announced that a financial deal had at last been reached to enable work to start on the west-to-east line in 2010, with the first trains scheduled to run in 2017.

Full details of the financial package for the ambitious project will be given by Chancellor Alistair Darling next week. But it is understood that the Government will put up a third of the money, with another third coming from the private sector and the final third from fare revenue.

Mr Brown, announcing the go-ahead to an assembly of Crossrail stakeholders in central London, said it was "a great day for London, for Crossrail and the British economy", with the scheme generating 30,000 jobs.

London Mayor Ken Livingstone, who was with Mr Brown at the announcement, said the project represented a "tremendous £16 billion, internationally-recognisable vote of confidence by businesses and Government in London's economic success". Transport Secretary Ruth Kelly said the link would provide "a lasting legacy to London for centuries to come".

The line will run from Maidenhead in Berkshire through central London as far east as Shenfield in Essex. There will be two spurs - one linking the line to Heathrow Airport in west London, the other running through south London via the Isle of Dogs to Abbey Wood.

First discussed in the 1970s and then actually announced by a Conservative Government in 1990, Crossrail was later shelved on cost grounds before being revived in recent years. Although supporting the scheme and steering a Crossrail Bill through Parliament, the Government had been reluctant until now to say just how much public money would go into the scheme.

Practically all of the private sector money for the project will come from three organisations - the City of London Corporation, the Canary Wharf Group and airport operator BAA. The City of London Corporation said it had agreed to support a financial contribution for Crossrail of £350 million.

This includes a one-off lump sum, payable to the Government in 2015/16, of £200 million from the City of London Corporation's own funds. The corporation has also agreed to lead the efforts to raise additional contributions totalling £150 million from businesses across London.

Mr Brown said Crossrail was "of enormous importance, not just for London but for the whole country".