The long-running conflict over funding for Transport for London has been eased, because the Government has agreed to provide £250 million in capital funding for 2024.

TfL has been battling with its finances ever since the Covid pandemic, although passenger figures on the Underground have been rising and are now almost back to the totals achieved before the lockdowns.

Fears that the One Day Travelcard would have to be scrapped to raise more money have also been dispelled, after TfL reached a new agreement on sharing the revenue with the Rail Delivery Group and the Department for Transport.

The new Government funding announced today will be used for TfL investment, including the new fleet for the Piccadilly Line which is being built by Siemens in Germany and Yorkshire.

Rail minister Huw Merriman said: ‘We’re investing in transport across the country and today’s agreement will have a tangible, positive impact not just for people travelling in and around the capital but also the millions who visit every year.

‘It is fair for Londoners and taxpayers, underpinning projects that will support hundreds of skilled manufacturing jobs in our vital rail sector.

‘We have invested billions into the capital’s transport system in recent years. This investment must be well managed in a way that doesn’t unfairly burden the pockets of taxpayers and motorists.’

London transport commissioner Andy Lord added: ‘Through a huge effort to reduce costs and rebuild our ridership and revenue following the pandemic, TfL is now on track to be financially sustainable in terms of its day-to-day operations. We are also able to cover the cost of the majority of our capital investment.

‘We, alongside London’s business stakeholders and others, have consistently made the case that additional government support for capital investment in transport is needed if we are to be able to continue to deliver vital improvements to London’s transport network, unlock new homes and support growth across London and the UK.’

However, the Liberal Democrats’ transport member on the London Assembly Caroline Pidgeon was critical.

She said: ‘The UK Conservative Government has once again failed to adequately invest in the future of London's public transport.

‘By constantly forcing TfL to operate on a short-term basis the Conservatives are ensuring that projects will end up costing more overall and that those that require long-term funding commitments have their futures placed in doubt.

‘The UK Government cannot continue to short-change London and expect it to continue to drive growth across the UK.’

Ben Curtis of the Campaign for Better Transport gave the news a qualified welcome, saying: ‘We welcome the provision of cash for the capital’s transport network which we had previously written to the transport secretary about. Whilst this settlement will ensure the wheels keep turning, it is not helpful to the general economy of the country to keep London on such a short leash.’