Jubilee line extension heads for the buffers

Transport sources say that plans to extend the Jubilee Underground line to Canary Wharf could be shelved after a Cabinet meeting this Thursday, writes Richard Thomson.

A row between the Treasury and John MacGregor, the Secretary of State for Transport, is expected to erupt in meetings this week which will decide whether the Government puts up more than pounds 1bn for the project.

A Cabinet committee, chaired by Lord Wakeham and charged with sorting out the problems at Canary Wharf, is meeting on Tuesday to consider the latest funding offer for the Jubilee line by the banks that now control the Docklands development. The matter is then expected to go to the Cabinet on Thursday, when a decision on whether to go ahead with the pounds 1.6bn project may be made.

The banks put forward a proposal 10 days ago offering to pay pounds 400m towards the project, providing the Government agreed to move a large number of civil servants to Canary Wharf. The scheme has the backing of the Department of Transport, but Treasury officials opposed it.

They are arguing that the banks have no right to put conditions on their contribution, but observers believe the Treasury objections are even more fundamental and that the underground extension is earmarked to be part of massive cuts in public spending planned by the Government. Failure to build the extension will dash hopes of attracting new tenants to Canary Wharf.