Ken Livingstone and John Prescott, the Deputy Prime Minister, are preparing for a long battle over the Government's plans for the semi-privatisation of the London Underground.
The new London Mayor, who officially took up his powers at midnight, threatened to seek a judicial review if the plans were a "bad deal for London".
The dispute over financing the modernisation of the Tube is likely to become a test of strength between the Mayor and the Government. Mr Livingstone said he believed the Government would move towards his position.
"I'm hoping we can avoid all of that, and we can sit down and sort it out sensibly. But the Mayor's job is to do what is best for London. If those contracts are bad for London, you have got to try to stop them," Mr Livingstone told the BBC's Breakfast with Frost programme.
The Deputy Prime Minister and the Mayor are expected to meet this week to thrash out their differences. There are signs that Mr Livingstonemay be prepared to drop his opposition if London Underground can show in the autumn that Mr Prescott's publicprivate partnership scheme to raise £7bn would be more successful than Mr Livingstone's plan to raise money through a bond issue.
Mr Prescott said delaying the plans to reach agreement with Mr Livingstone could take four years. "I am not prepared to do that.
"What is best for London is to get the investment. One of the problems with the Underground is that it's been plagued by political differences between governments and Treasury rules and now it could be between different mayors. What we want is long-term solutions to these difficult problems and that's what I am about to implement," he told the BBC's On the Record programme.
But Mr Livingstone predicted that the review by London Underground would show that Mr Prescott's plan was not a good deal and that the Government would "back out of it.
"If they don't, and they try to push ahead with the deal that is bad for London, you would have to consider going to a judge and saying, 'Well, is this really right?' Judicial review is there so that citizens can go and say, 'Well look, government, local government, is not really doing what is in our best interests. But we will have to wait and see the documents," Mr Livingstone said.
Meanwhile, Mr Prescott is seeking to head off a backbench rebellion tomorrow by offering more guarantees about the safety of his plans for the semi-privatisation of air traffic control. The Government ishoping that no more than 50 Labour MPs will vote against Mr Prescott's Transport Bill.
Six "enhancements" to the safety assurances were tabled at a meeting with the unions and Lord Macdonald of Tradeston, a Transport minister. These include a guarantee that safety will be written into the strategic partnership agreement for the new company that is to take over the National Air Traffic Service (Nats).
A director will be given specific responsibility for safety; a safety monitoring committee will be set up; the Nats safety management system will be retained; an annual audit of the safety management system will be carried out by the Civil Aviation Authority; and the standard of training will have to be approved unanimously by the new company board.Reuse content