Judge gives go-ahead to Tube plans

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Livingstone loses battle to prevent Tube using PPP funds

Christian Wolmar: 'Good old plucky Ken' basks in the glow of his defeat

Ken Livingstone failed yesterday in his High Court attempt to block the Government's plans for using private capital to fund the running of London Underground.

Stephen Byers, the Secretary of State for Transport, Local Government and the Regions, said the public-private partnership for the Tube would go ahead. A judge ruled that the Mayor of London had no veto over the proposals. But millions of commuters in the capital face continuing uncertainty because Mr Livingstone warned he was considering an appeal, and unions threatened strikes over safety fears raised by the plans.

Labour MPs in London also renewed their opposition, claiming that ministers had undermined the central principle of the Government's devolution agenda. Lawyers for the mayor and his transport commissioner, Bob Kiley, had said the Government's £13bn scheme would result in an underground system that was "fragmented, inefficient, uneconomic and ... unsafe".

But Mr Justice Sullivan rejected their application for a judicial review, declaring that legislation passed by Parliament made clear that ministers, not the mayor, had the final say over the plans. Mr Livingstone and his Transport for London organisation were given leave to appeal. That can be expected on 17 September.

Mr Livingstone said outside court: "As the judgment makes clear, today's decision is not on whether the Government's PPP is safe or efficient. The court's decision is simply that, irrespective of these issues, the Government has the legal right to impose this scheme on London."

With Tony Blair facing pressure from unions and Labour MPs to tone down his plans to inject private-sector management into the main public services, the court decision will be greeted with relief by Downing Street. Mr Byers said London Underground and private bidders would resume negotiations today on overhauling trains, stations and track.

The minister agreed that there had been concerns about safety but promised a "double safety lock", with the Health and Safety Executive given the final say on the proposals of the Tube and private firms.

"There will be no privatisation or part-privatisation of the Tube under their plans," he said. "London Underground will own and run the Tube. London Underground will co-ordinate infrastructure work, drive trains, operate the signals and staff the stations. It will be publicly run and privately built."

Mr Byers, whose enthusiasm for the plans is echoed by Gordon Brown, the Chancellor, said he had amended the proposals to give the public sector more control over the safety elements of the contracts.

But Andrew Dismore, Labour MP for Hendon and secretary of the 55-strong London Group of Labour MPs, said they wanted more safety reassurances. "London MPs still have reservations," he said. "These reservations must be addressed by the Government." Mick Rix, the general secretary of the train drivers' union, Aslef, said it would be balloted on industrial action if the PPP operation raised safety concerns. "The Government may have won a legal victory, but it has lost the political argument and public opinion," he said.

Despite Mr Livingstone's failure to block PPP, he could achieve a notable court victory today if he manages to lift an injunction preventing the publication of an independent report on the scheme. The Deloitte & Touche report assesses whether PPP offers value for money, but Mr Kiley was barred by injunction from revealing its contents.