Business leaders and many politicians have been rallying to the defence of HS2, as reports continue to allege that the Prime Minister is poised to cancel Phases 2a and 2b, north of Birmingham to Crewe and Manchester.

It is said that a decision could be announced before the Conservative Party conference in Manchester, which starts on Sunday.

The chair of the National Infrastructure Commission Sir John Armitt told the BBC that cancellation would be a ‘tragedy’.

He continued: ‘In Birmingham we have already seen the consequences with major investment, 20,000 new jobs predicted and 2,000 new homes predicted. But what we have to do is get a grip on the costs.

‘You look at whether you have done some gold-plating. Railway engineers always want to do the absolute ideal and you have to challenge that and ask whether that is absolutely essential – can we silver-plate this rather than gold-plate it? You might slow it down a bit, that gives you some savings on the alignment.

‘You have to really have costs as your focus, day in day out where you are constantly challenging and saying how can we make sure we keep costs down and keep within our budget. We owe that to the whole project. There are massive benefits to come from this. The benefits from Birmingham to Manchester are £55 billion, and you are increasing the benefits across the whole of the north west because in fact it will connect in to the improvements that government has announced between Manchester and Leeds, so you have a whole connected railway.

‘You control the costs, you don’t run at the first whiff of gunfire. You buckle down and you address those cost issues and you address them on a daily basis across the whole project.

‘The existing West Coast is the most densely used and heavily used railway in Europe. By freeing up some capacity you’ll get more benefits for freight, which we want to do. We want to get lorries off the roads and we want to increase rail freight.

‘There are massive benefits to the economy by continuing this. If we don’t continue what are we saying to the rest of the world? What are we saying to all those investors who we want to bring into the UK. Here is a country that sets itself ambitions and then runs away when it starts to see some challenges. We have to meet the challenges.’

However defence secretary Grant Shapps, who was transport secretary in Boris Johnson’s government, said that Covid, inflation and the war in Ukraine had badly affected public finances. He maintained that a reponsible government should ask: ‘Does this still stack up for what the country requires, in terms of where it’s spending its resources, and at what time?‘

It is reported that Rishi Sunak is set to consider the decision in a meeting with chancellor Jeremy Hunt this week, before the Conservative conference begins.

Mr Shapps also told Sky News: ‘If you don’t stop and reflect after things have changed, that is a foolish approach.’

The HS2 project was launched by the last Labour government. On 14 December 2009, before a major report was published, transport secretary Lord (Andrew) Adonis had said: ‘The potential for high speed rail to regenerate and reinvigorate is now a reality for people in Kent, but the size of Britain's high speed network lags behind that of many of our European neighbours and doesn't connect any of our major cities.’