The multi-billion pound upgrade of the London Underground system suffered a setback today after the company responsible for maintaining most of the capital's tube network announced that it is to go into administration.
Metronet confirmed in a statement that it has asked London mayor Ken Livingstone to appoint an administrator for two of its subsidiaries responsible for overseeing the enhancement and maintenance of nine tube lines.
The company, appointed to carry out the work under a public private partnership (PPP) funding agreement, said that it had made the request following "a period of financial uncertainty".
Metronet had requested an extra £551 million of emergency funding to cover the cost of budget overruns, but PPP arbiter Chris Bolt ruled on Monday that the firm should only receive £121 million.
"This company has now established that it has no access to such further funds," said Metronet, which has been involved in a long-running dispute with Transport for London over who should be responsible for meeting the rising cost of upgrading the capital's tube network.
The company added that it would therefore be unable to carry out its contract.
It is now expected that London's mayor will step in to ensure that essential work continues to maintain and upgrade the capital's tube system.
Following the collapse of Metronet, Mr Livingstone has also come under pressure from trade unions to bring the tube contracts back into the public sector.
RMT general secretary Bob Crow said that we would seek assurances that existing negotiated agreements would be honoured, when he meets with the company and its administrator later today.
"Meanwhile we will also be pressing both the mayor and the transport secretary to take the necessary steps to bring the contracts back into the public sector and to bring a permanent end to this failed experiment," he stressed.