Sadiq Khan warned 'Government will seize control of TfL if demands not met'

The Government has reportedly threatened to seize control of Transport for London unless Sadiq Khan accepts a package of measures including higher council tax for Londoners.

A larger congestion charge zone and higher Tube and bus fares are also among measures said to be put to the London mayor.

In a letter to Mr Khan seen by the Financial Times, Transport Secretary Grant Shapps proposed the deal involving six months of rescue funds for TfL from now until March 2021.

He wrote that the Government would take "reserve legislative powers allowing us if necessary to direct TfL" if the measures were not followed.

Mr Shapps added that Downing Street's seizure of TfL would be combined with a further series of "short-term funding settlements."

The demands on the London Mayor included a call for Londoners to pay more council tax to improve TfL's finances and for Mr Khan to begin "pensions and workplace reform" in TfL.

The letter also asked Mr Khan extend the central London congestion charging zone to cover the same areas as the Ultra Low Emission Zone from October 2021, reports the Times.

The London Mayor responded with a letter of his own on October 6 in which he reportedly rejected Mr Shapps' demands, saying an expansion of the congestion zone would have negative economic consequences and a council tax supplement would “place even more reliance on an already broken form of taxation and would be regressive”.

A spokesperson for the Mayor of London said: “Negotiations with the Government continue, but suffice it to say there is simply no way any Mayor could accept conditions of this nature, which would make it harder to tackle the virus and choke off London’s economic recovery at the worst possible time”.

Meanwhile a Department for Transport spokesperson said: “We have agreed an extension to the support period and to rollover unspent funding from the Transport for London Extraordinary Funding Agreement, allowing further time for negotiations for a new settlement.

“These discussions will ensure London has a safe, reliable network. It would be inappropriate to disclose further details at this stage.”

The Government agreed on Friday to extend its financial support of TfL for two weeks while negotiations on a new bailout continue.

TfL boss Andy Byford described the two-week extension as a “sensible pragmatic solution” that “keeps people’s minds focused”.

He added: “We can now get this deal done. We really are very close, and it’s absolute top priority for all of us to get this thing across the line, and I believe that the two weeks will suffice.”

TfL’s finances have been severely hit by the drop in travel caused by the coronavirus pandemic.

A £1.6 billion bailout agreed with Mr Khan in May put funding in place until Saturday.

It was reported last month that Mr Khan was seeking a £5.7 billion bailout to keep London’s transport system going for the next 18 months.

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TfL funding extended two weeks as talks continue with Government