Byers ready to ignore opposition and push on with Tube sell-off

The Government is expected to press ahead tomorrow with the public-private partnership (PPP) scheme for London Underground despite a last-minute demand from senior Labour MPs for the plan be abandoned.

Amid fresh warnings of legal action from the Mayor of London, Ken Livingstone, London Transport is expected to give the go-ahead "in principle" for the plan, and the Secretary of State for Transport, Stephen Byers, will follow suit. Mr Byers will also publish a report by the accountants Ernst & Young into the "value for money" yielded by PPP, which he believes will justify the exercise.

Mr Byers was in meetings yesterday planning the campaign to handle media reaction to the PPP.

But in a strongly worded report, the Labour-dominated Commons transport committee called on the Government to think again about such a "risky" project. The PPP, aimed at delivering a £13bn revamp of the network, was among the most complicated yet devised and the funding structure was "experimental", it said.

Ministers were warned that the framework envisaged would lead inevitably to expensive contractual disputes and to conflicts between staff and employers. The document said it was "disgraceful" that the Health and Safety Executive had been given only one month to decide whether safety plans were adequate.

The report, which was backed unanimously by the all-party committee, said initial forecasts that the PPP would provide a saving of £4.5bn were "inadequate and flawed".

For decades, Treasury ministers had starved the network of long-term funding and the system was in an "atrocious state" as a consequence. There should be a "considerable increase" in the level of government subsidy because of the severe impact on London and the national economy if its targets – of a 15 per cent increase in capacity by the 20th of the 30-year scheme – were missed.

Gwyneth Dunwoody, the Labour MP for Crewe and Nantwich and chairman of the committee, tore into the Treasury – and by implication the Chancellor, Gordon Brown – for refusing to give evidence. She said the committee was "appalled" by the ministry's behaviour given its role in sponsoring the PPP.

Mr Livingstone said it should now be "inconceivable" for the Government to press ahead with the scheme. Any attempt to proceed could trigger further legal action from Mr Livingstone and his Transport Commissioner, Bob Kiley.

Mr Byers said he would study the recommendations closely. "The key issue is the urgent need to tackle the crumbling infrastructure of London Underground. Now is the time to take decisions about how to get the investment in," he said.