Gordon Brown today gave the official go-ahead for Crossrail and hailed it as a "great day for London".

It follows a 20-year campaign by the Evening Standard on behalf of business and commuters for the east-west line.

However, the jubilation which greeted the announcement was offset by the disclosure that the completion date for the project had slipped a year to 2017.

Once completed, trains will run from Maidenhead, via Heathrow, the West End and the City to Canary Wharf and beyond. It will cut the time from Canary Wharf to Heathrow from 67 minutes to 43.

The Prime Minister said Crossrail was of "enormous importance", not just to London but to the whole country. "This is a great day for London, for Crossrail and the British economy. I believe we have come up with a workable, robust and cost-effective business plan. Crossrail will add £20 billion to the UK gross domestic product. Today's go-ahead proves that London works best when London works together," he said.

There was delight from business leaders and politicians that the £16 billion scheme was given the green light - though it was mixed with frustration that it has taken so long for the Government to come up with the funds.

Many believe the scheme would stil be on hold if an election was not looming.

Final details of the funding will be announced in the Comprehensive Spending Review next Tuesday. In order to ease the burden on the Treasury finances, construction work has been put back to 2010, meaning the first trains will not run until 2017 at the earliest.

The delay has also been caused by concerns that London does not have the skills to run another major infrastructure project at the same time as the Olympics.

Shadow transport secretary Theresa Villiers said the Government's dithering over the financing had added £300 million to the building costs.

She added: "Every time an election seems imminent, the Government wheels out the promise of Crossrail. I hope that Brown is really on board and not using it as another political stunt." But Ken Livingstone said the announcement was "tremendous", adding: "With a capacity twice that of the Jubilee line, and expanding London's rail capacity by 10 per cent, it is the largest addition to the transport system for more than 50 years."

Transport Secretary Ruth Kelly said: "A funding deal to secure Crossrail's construction has eluded governments for decades. I am delighted after all the hard work that one is now in place."

Boris Johnson, the Conservative candidate for Mayor, said: "I am delighted to hear that Crossrail will be going ahead. My team will be looking closely at the arrangements to ensure the best possible deal for London."

A number of hurdles still need to be cleared before work can begin including the Crossrail Bill.

Tony Travers, of the London School of Economics, said the scheme was vital to maintain London's growth, adding: "We must hope that today's news, coming immediately before what may be a general election campaign, is the real thing.

"There is always the risk that a deal rushed through immediately before an expected poll might fall apart in the months after such an election."