London Underground could be broken up and sold off to the private sector under radical plans being considered for inclusion in the Conservative manifesto for the next election.
The privatisation plan, which has been on the table for several years, is being actively considered by Michael Heseltine, the Deputy Prime Minister.
The idea was swiftly condemned by Labour and the Liberal Democrats. Clare Short, Labour's transport spokeswoman, said: "The Tories are now threatening to bring to our underground network the fragmentation and chaos that has marked rail privatisation."
But London Conservative MPs insisted yesterday that privatisation was the only way to secure the significant injection of capital, free from what one called "the dead hand of the Treasury", that was needed to turn the Underground into a fully modernised system for the 21st century. They point to what they view as the successful sell-off of London buses and the established use of the private finance initiative, including the scheme for new trains for the notorious Northern Line.
But one senior London Tory questioned the wisdom of the plan. Sir Rhodes Boyson, MP for Brent North, made clear his support would depend on operators' being obliged to guarantee sufficient capital investment and the provision of five new cross-London lines.
The option most likely to appeal to the private sector would be the sale of each line as a franchise in the same way as BR privatisation. Each of the Tube's 11 lines already operates virtually as a separate business.