The new figure – double the current estimated cost of the controversial high speed train line – was revealed in a report by the Institute for Economic Affairs published today.
Campaigners immediately spoke of their shock and backed the IEA's calls for the scheme to be scrapped.
They say the new figure is a bitter pill for people in Staffordshire, in particular, to swallow at a time when the government is planning to strip services at Stafford Hospital.
In the report, the IEA says the cost of HS2 has been vastly underestimated and it argues that the £80bn price tag could deliver £320bn of value if spent on road and other rail and transport projects.
The report suggests that the Government's £42.6bn estimate would spiral because of a variety of factors such as changes to routes, new stations and compensation payouts.
Dr Richard Wellings, the report's author, said it was time the Government abandoned its plans to proceed with HS2. He said: "The evidence is now overwhelming that this will be unbelievably costly to the taxpayer while delivering incredibly poor value for money.
"It's shameful that, at a time of such financial difficulty for many families, the Government is caving in to lobbying from businesses, local councils and self-interested politicians more concerned with winning votes than governing in the national interest."
HS2 will cut through swathes of countryside such as Whittington near Lichfield, parts of Stafford and surrounding areas.
Resident and campaigner Rolfe Pearce, of Colwich near Rugeley, said: "In Staffordshire we need investment in so many other things. This new figure, if it's true, is a massive embarrassment to the government."
Stop HS2 campaign manager Joe Rukin said: "The IEA's study is the most hard-hitting attack on the project by an independent group so far. The crescendo of opposition to this project is just getting louder and louder and the government is still not listening."
HS2 Ltd spokeswoman Rhona Crawford said: "The IEA report is extremely speculative and completely lacking in concrete facts. The headline £80bn figure appears to have been arrived at by lumping together transport schemes that are not part of HS2 and in some cases are many miles from the line.
"The report claims a theoretical and unsourced cost of £30bn for these projects, although elsewhere admits many will never be built.
"The IEA also fails to show how a myriad of piecemeal incremental transport schemes would address the capacity and connectivity issues that we face or how they would even come close to providing the opportunities that HS2 as an Engine for Growth will bring to the national economy.
"The fact is HS2 is absolutely vital for this country. Without it the key rail routes connecting London, the Midlands and the North will be overwhelmed. This report does nothing to challenge these undeniable facts."