Rishi Sunak could axe the second half of HS2 after an £8 billion expected increase in costs threatened to wipe out the budget for other transport projects. 

Mr Sunak and Jeremy Hunt, the Chancellor, are expected to meet early this week to finalise plans to scrap phase two of the troubled railway line, from Birmingham to the North. 

A Whitehall source said: “There is a reluctance to throw good money after bad.”

The Telegraph understands that officials expect the upper estimate of building the initial London to Birmingham stretch of the line to increase by at least a fifth – or more than £8 billion – from the £45 billion figure published in June 2022.

The sharp increase is forecast despite the Conservatives’ insistence that they would take control of spiralling costs and lengthy delays following a major review carried out under Boris Johnson.

The figures have raised concerns in Government that the total costs of the scheme are once again likely to exceed £100 billion – the estimate touted by Mr Johnson before scrapping the eastern leg of the line to save costs.