PPP firms 'close to funding deals'

The two private consortia bidding to take over the Tube say they are "within weeks" of concluding deals with their financial backers to provide £4 billion funding - pushing the Government's controversial part-privatisation of the network a significant step closer.

A spokesman for Metronet, led by contractor Balfour Beatty, denied City rumours they would not be able to finance the planned investment for the Tube because backers would shy away following the Governmentinstigated financial collapse of Railtrack.

Metronet - taking over the largest portion of the network with all the subsurface lines, including the Circle and District, and the deep-level Bakerloo, Central and Victoria - is on the point of raising £2.5 billion.

The spokesman added: "We are very optimistic about reaching financial closure in time to meet the Government's target."

The public private partnership, under which the Tube will be split into four main sections for the next 30 years with only the running of the trains and operation of signals remaining under public control, is now due to begin next April - two years late.

A source close to the bidding denied that the consortia is ready to sign the contracts "within days", but said: "There are a few more weeks of detail to be sorted out yet. But we are getting there and the money is there."

Meanwhile, the Health and Safety Executive is to release within the next few days its latest report on the PPP, which is expected to be broadly supportive of the partial sell-off.