MPs and northern mayors, along with business and transport leaders, have reacted with fury after this publication reported that the second stage of HS2 from Birmingham to Manchester could be ditched over cost concerns.
Mr Sunak is also pushing to end the line early in the capital, so that trains would have to stop at Old Oak Common, six miles away from Euston, according to The Times.
Although discussions are still active, a senior government source told the newspaper that the PM had already “made up his mind” to axe both the line going into Euston and the Manchester link.
“Unless he can be persuaded to change course, it is a done deal,” they said, adding: “Ending the line at Old Oak Common is pretty much the definition of a railway to nowhere.”
Scrapping the Euston link would save at least £4.8bn – the estimated cost of the upgrade to the central London station that would enable it to link to the high-speed line and accommodate HS2 trains.
HS2 services were due to start running into Euston when the project reaches Manchester in 2040. But scrapping the final section would mean passengers having to get off at Old Oak Common – near Harlesden in northwest London – and take the Elizabeth line into central London.
Mr Hunt confirmed in an interview with the Financial Times that he was discussing how to address HS2 cost overruns with Mr Sunak – and he refused to promise that the part of the project serving Manchester would be completed.
“With any big infrastructure project, let alone the biggest infrastructure project in the country, you would expect us to have conversations about managing cost overruns,” Mr Hunt said.
Asked whether HS2 would be built in full, the chancellor said: “I’m not going to be drawn on the details.”
A cost estimate seen by The Independent shows that the government has already spent £2.3bn on stage two of the high-speed railway from Birmingham to Manchester, but shelving the northern phase would save up to £34bn.
Though Mr Sunak and Mr Hunt – who met to discuss costs earlier this week – are not thought to have come to a final decision, the chancellor could set out the plan for HS2 as soon as the mini-Budget.
The chancellor is desperate to find some fiscal headroom to allow for tax cuts either in the autumn or as part of the full spring Budget.
Former Treasury minister Jim O’Neill said the prospect of cancelling the northern phase after 13 years of work shows that the UK’s approach to infrastructure is “a disaster”.
He told The Independent: “It is very, very disappointing, and the country’s long-term investment decision-making is a disaster.” Lord O’Neill added: “The debate and framework for these long-term investment decisions in the UK is dreadful.”
The mayor for the Liverpool City region, Steve Rotheram, and West Yorkshire mayor Tracy Brabin have joined the mayor for Greater Manchester, Andy Burnham, in condemnation of the idea of scrapping phase 2 – accusing the government of “holding the North down”.
Labour mayor Mr Rotheram told The Independent: “Far from levelling up, this government’s actions continue to hold the North down. Voters won’t forget – and they’ll be handing Rishi Sunak and his party a one-way ticket to opposition at the general election.”
The prime minister’s official spokesperson has told reporters that “spades are already in the ground on our HS2 programme, and we’re focused on delivering it” – but would not promise that the line would go to Manchester.