Byers under fresh Tube attack

Londoners are still waiting for Tube improvements

Transport Secretary Stephen Byers is facing a fresh round of condemnation for his plans to get private firms to rebuild and run parts of the London Underground.

The government's own spending watchdog, the National Audit office, says that he has broken Whitehall rules with his promise to bail out the private firms if the project collapses.

Stephen Byers is unfit for high office

David Rendell
Lib Dem MP

His opposite number on the Conservative benches, Eric Pickles, called for him to be sacked and said: "Just when you thought it couldn't get any worse, it just has."

The Labour MP who chairs the Commons Transport Select Committee, Gwynneth Dunwoody, said that the government had got into a "silly situation" with its efforts to save face.

London Mayor Ken Livingstone, did not blame Mr Byers for the situation, saying that he had to deal with his predecessors' mess - likening him to the "zoo keeper who has to walk behind the elephant with a bucket and spade".

Moral obligation

The latest criticism of Stephen Byers is over his plans to write "letters of comfort" to companies considering investing in the tube.

These indicate the government would have a moral obligation to bail them out if the project collapsed.

But the National Audit Office said he had not complied with the government's own accounting rules in doing so, and had only given MPs four rather than 14 days to consider the plans.

Liberal Democrat member of the House of Commons Public Accounts Committee, David Rendel said it showed Mr Byers was "unfit for high office".

It comes just days after Mr Byers angered many Labour MPs by announcing £250m pounds to bail out Railtrack shareholders.

'Really terrifying'

Mr Livingstone said the letters to the private sector firms not only promised to cover any losses, but also to pay them any profits they might have made over the 30 years contracts.

He said this might mean London or national tax payers being forced to pay out up to £7bn even if the scheme collapsed in the next two years: "It's really terrifying".

Mrs Dunwoody also highlighted the lack of any termination clause in the contracts, adding that if there was a government bail-out clause then many might wonder what the point of getting the private sector involved was.

Mr Livingstone has opposed the plans for part-privatisation of the London Underground since before he became Mayor of London.

He backs a scheme to use bonds to raise the billions of pounds to pay for the improvements planned over the next 30 years.

The government says that its proposals will mean quicker and better improvements to the London Undergound network.