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Nearly £2 billion of public funds are to be provided to London Underground contractor Metronet in order to clear the troubled company's debts.

Transport secretary Ruth Kelly told the House of Commons that the government would provide the cash to Transport for London (TfL) in order to repay the huge debts run up by Metronet, which currently total £1.7 billion.

The arrears will be repaid within a week, the government confirmed, in order to remove the contractor from administration.

Metronet ran up the huge levels of debt last summer following demands from TfL, which oversees the bus and Tube networks of the capital city, to urgently upgrade nine of the 12 London Underground lines.

Soaring temperatures in summer 2006, several unscheduled delays, massive overcrowding and other problems had led to many complaints from customers using public transport.

But Ms Kelly said the financial deal struck between the government and Metronet was vital to ensure the Tube remained fully up-to-date and operational.

"The settlement gives London Underground the resources needed to manage Metronet's administration and move toward a more stable long-term footing and continue the work to maintain, renew and upgrade the Underground," Ms Kelly said in a statement to the Commons.

When Metronet entered administration last year, TfL put in a bid to buy the failing company after disputing financing levels the contractor claimed was necessary to bring the network up to standard.