Ministers yesterday announced a £65m emergency grant to bale out London Underground ahead of the part-privatisation of the network.
The decision means nearly a quarter of the £280m transport package announced in Tuesday's Budget will be spent on the Tube system, much of it on refurbishing and replacing escalators which have been plagued by breakdowns. Bidders are due to submit detailed plans for the deep-level part of the network next Friday.
Apparently, the Government has effectively abandoned any idea that London Underground will be able to survive without state subsidies in the short term. University College London recently estimated that there could be a shortfall between income and expenditure of up to £175m a year.
Lord Macdonald, the Transport minister, also pledged £15m to prepare the way for the £500m extension to the Manchester Metrolink, a £30m contribution to the cost of extending London's Docklands Light Railway to the City Airport, and £14m so all pensioners will pay a maximum half-fare for bus travel.
The minister, under fire for not promising more for transport, said the fund would generate a total investment of more than £850m when private sector expenditure was taken into account.
The pressure group Transport 2000 described the extra amount as a pittance, saying Labour was spending less on public transport than the Conservative administration before rail privatisation. Lynne Sloman, spokeswoman for the group, also expressed alarm over the £64m for road plans. Some £25m will be used to accelerate six road schemes and £3m more to prepare for four entirely new projects.
Bernard Jenkin, shadow Transport minister, said the £280m total was "a risibly small amount" compared to sums Labour was taking in taxing road users.
"Transport needs billions of pounds in investment. Yet all that John Prescott can get out of the Treasury is a bag of liquorice allsorts with which to try to comfort people on their journeys in 'Standstill Britain'.
"This announcement shows that under Labour, there is no money and no strategy for transport and no prospect that Britain will get moving again.
"Yet again, John Prescott has been the biggest loser in the Budget. The Government already takes £36bn in tax from roads users and the Budget measures will bring in an extra £715m. But all the Deputy Prime Minister gets is a few scraps."
Paul Hamblin, head of transport at the Council for the Protection of Rural England, said: "This announcement is two steps forward for integrated transport and one step back.
"Welcome measures such as safety schemes are undermined by the continuing commitment to new roads. These will cost the countryside dear."
* London Underground yesterday blamed a "high tide" for severe congestion on the Circle and District Lines. Water seeped into ancient tunnels near Blackfriars station on Thursday night, halting some services for three hours.