An extension of the Midland Metro tram network was looking less likely than ever today after the new Transport Secretary refused to commit to funding.

And the Tory Lib Dem government rejected a call from Birmingham City Council to extend a “hardship” scheme, for those affected by a planned high speed rail line, to businesses.

In an interview with the Express & Star new Tory Transport Secretary Philip Hammond also said that the recent trend of replacing roundabouts with traffic lights was unlikely to continue.

He blamed the country’s enormous budget deficit.

The former Labour government had pledged £81m to the Metro extension, through Birmingham from the existing Snow Hill terminus to New Street station, and a replacement of the 19-tram fleet worth £127m.

But Mr Hammond said the Labour promise had been “irresponsible”. It would be autumn before departments knew how much funding they would have over the next three years.

But an act of Parliament granting permission for work to start runs out at the end of this year.

Transport authority Centro said it was expecting to know in the autumn whe-ther it would get funding and was not concerned by Mr Hammond’s timetable.

Mr Hammond said: “I’m not saying it won’t go ahead but funding was not in place when Labour made its ‘promise’. I cannot promise that a decision will be made even as early as autumn.”

Mr Hammond rejected the call from the city council to open a hardship compensation scheme to businesses affected by the planned high speed rail network.

One of the worst affected schemes is a new £123m campus to be built by Birmingham City University — where a new rail station is set to be built. The university is set to lose £30m it has already invested if the scheme goes ahead.

Mr Hammond said: “The hardship scheme is not meant to apply to businesses, it’s for households.”

But he said there was room to reconsider the route the £34bn high speed line will take.