Shadow chancellor Ed Balls has signalled Labour could scrap HS2, the controversial high-speed rail project, if it regains power in 2015.
Mr Balls appeared to suggest a significant weakening in his party’s support for HS2 in his keynote conference speech in Brighton.
He attacked the spiralling costs of the scheme, currently estimated to be £50bn, and warned there would be no ‘blank cheque’ if he was chancellor.
The comments will fuel fears in Tory high command that cross-party support for the project could fall apart and will ramp up tensions ahead of its own conference next week.
Mr Balls said: “Under this government, the High Speed 2 project has been totally mismanaged and the costs have shot up to £50bn.
“David Cameron and George Osborne have made clear they will go full steam ahead with this project – no matter how much the costs spiral up and up. They seem willing to put their own pride and vanity above best value for money for the taxpayer.
“Labour will not take this irresponsible approach. So let me be clear, in tough times – when there is less money around and a big deficit to get down – there will be no blank cheque from me as a Labour Chancellor for this project or for any project.”
Shadow chief secretary to the Treasury Rachel Reeves later said Labour could scrap the project if it was no longer ‘good value for money and costs continue to rise’.
British Chambers of Commerce chief John Longworth called on Labour to clarify its position, while Katja Hall, the CBI’s chief policy director, said: “We’ve always said that the Government must redouble its efforts to sell the benefits of HS2 while keeping a tight lid on costs.
“But let’s not forget why this project matters. HS2 will connect eight of our 10 biggest cities, boost regeneration projects across the country for years to come, and will avert a looming capacity crunch on the West Coast main line.”
Last week Labour’s shadow rail minister Lilian Greenwood had said that the party was still ‘completely committed’ to HS2. Lord Adonis, a former transport secretary under Gordon Brown, is an enthusiastic supporter of the scheme but Lord Mandelson and Alistair Darling have both spoken out against it.