PRIME MINISTER Tony Blair has personally intervened in efforts to rescue the £500M Manchester Metrolink extension after transport secretary Alistair Darling axed it in July.
Blair and Darling met with 20 Manchester MPs last week to review the project and explore ways of saving it.
They decided to set up a working party chaired by transport minister Tony McNulty.
Manchester MP Keith Bradley will also sit on the group representing the interests of the Greater Manchester Passenger Transport Authority (GMPTA).
'I think that there is a way to resolve this. I would like to see more light rail, ' Darling told the Labour party conference on Monday.
In July, Darling dramatically scrapped three major light rail projects in Manchester, Leeds and South Hampshire (NCE 22 July).
All three of the schemes had the same problem - the costs had doubled.
'In Manchester the cost went up from £200M to £500M and the £500M scheme provided less than the original £200M one did.
There is no way the government can meet these costs without asking questions, ' Darling insisted.
The decision to review the scheme follows a public outcry over Darling's original plan to scrap it. Other projects in Leeds and South Hampshire have also been axed, but local support for them has been less vociferous.
GMPTA officials said they were working on a new plan to reduce the cost of the £500M scheme.
They said this could involve sharing the risk of shortfalls in fare revenues between the public sector and private operators rather than transferring it all to private companies.
Officials are also considering working with bus companies to provide bus services which complement the new scheme rather than compete with it.
GMPTA is planning to review and reduce construction costs to minimise the government's contribution.
The working party will review the new plan in mid October.
So far £170M has already been spent on the third phase of the Metrolink, which will link Rochdale, Oldham, Manchester Airport and Ashton-Under-Lyne with the centre of Manchester.