Chancellor Jeremy Hunt has given the clearest signal yet that he is ready to axe HS2's northern leg as he attacked some of the high-speed rail project's 'totally unacceptable' costs.
The chancellor is under mounting pressure to spell out the future of the HS2 after The Independent revealed that he and Rishi Sunak were in talks to scrap the Birmingham-to-Manchester route.
reports suggest Mr Hunt already has signed off on'reallocating' money for HS2's northern leg to other transport projects - but Mr Sunak is yet to approve the radical move.
The report came after The Sun reported 167 staff in HS2's PR department costing £8m a year. The Independent has revealed that project Redwood talks involving PM and chancellor have eyed £34bn in savings from shelving the northern phase, which will be halved over the next few months.
In a statement on scalebacking HS2 - Mr Hunt said that when it was made 'you will see that we remain very committed to making sure we have the right economic infrastructure'.
Some red wall Tories in the influential Northern Research Group have signalled they are willing to accept a delay to the northern leg of HS2 - so long as Mr Hunt and Mr Sunak commit to east-west rail projects known as Northern Powerhouse Rail.
But some top government leaders and senior Tories want the government to commit to both. Former levelling up minister Dehenna Davison and ex-chairman Jake Berry became the latest senior Tories to call on the government to 'crack on' with phase two in the north.
In a statement on Monday, ITV's Robert Peston claimed that the Treasury had'signed off package of reallocating' HS2 money to transport priorities.
The row over The Independent's revelation that HS2 will be cut back was raised at a Tory conference on Monday.
Henri Murrison, the chief executive of Northern Powerhouse Partnership, has accused Sunak and government officials of lying about the effect of cancelling the project.
Huw Merriman, the Tory minister for rail, said things would become clearer at the same event. As a result of rising costs, HS2 is churning out other opportunities to deliver more across the country.
Sunak and Mr Hunt were understood to be considering an option to quell a Tory backlash by delaying the Birmingham to Manchester line by up to seven years.
But Mr Hunt said he flew to Manchester for the Tory conference instead of taking the train. He said strike action was a result of choosing the carbon-intensive mode of transport.
On his return journey, the cabinet minister said: I'll probably be driving home because I think there's another train strike on Wednesday.