Labour could wait until after the next election before deciding whether to press ahead with building the new high-speed rail line.
Party sources said it may delay making a final decision on the High Speed Two project, known as HS2, until after polling day in May 2015.
It comes despite warnings from Labour council leaders across the country that they urgently need clarity about whether the scheme to build a new line linking London with Birmingham, Manchester and Leeds will go ahead.
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Birmingham City Council leader Sir Albert Bore said Labour leader Ed Miliband risked “a protracted public conflict” with his own party in the run up to the 2015 General Election, in a blunt letter written on behalf of the eight biggest cities outside London.
He is the transport spokesman for the Core Cities Group, which includes Birmingham, Bristol, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield.
Other council leaders have written their own letters to Mary Creagh, the Shadow Transport Secretary.
Nick Forbes, the Labour leader of Newcastle City Council, told her: “In the Core Cities we are already doing our bit but councils and businesses need to move forward with confidence in the future of HS2. So, I urge you to give the clearest commitment that we can all plan for future, sustainable growth supported by HS2 and wider transport investment.”
Keith Wakefield, leader of Leeds City Council and a member of the Core Cities cabinet, said: “We’ve all done it. I’ve written in strong support [of HS2], saying our cities need investment in railways – particularly in the North.”
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Liverpool’s Labour mayor Joe Anderson told a national newspaper: “Ed Balls should stop using this in a political way. We have to get on with creating growth and building the infrastructure that’s fit for the next century.”
Sir Albert’s letter stressed that local authorities were already drawing up plans and attracting private investment on the understanding that there was a cross-party consensus in support of the HS2 project.
The previous Labour Government led by Gordon Brown announced it was committed to building HS2 in 2010. Labour said at the time that the project could only go ahead with cross party support – a position held by the current Conservative and Liberal Democrat coalition today. It appeared briefly as if confusion about Labour’s stance had come to an end after The Guardian and BBC’s Newsnight reported that Mr Miliband was ready to throw its support behind HS2, if the costs were reduced.
But this was dismissed as “nonsense” by senior Labour sources.
Separately, a different Labour source said: “With a project of this size and expense it’s right that we take a very hard look at both the costs and the benefits of it.
“The Government doesn’t seem to have done a very good of that over the last few months.
“It is not true to say we have decided one way or the other. We are genuinely open minded about this issue.
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“As the debate and the evidence about the costs and benefits continues to occur over the coming period, the idea that we have decided we are definitely going to withdraw our support for it and not support it is not true.
“But nor have we decided that ultimately we will come back in to line and will support the project whatever happens, because that’s not true at all.
“We believe in investment in transport and a new north south rail link, but not at any cost for High Speed Two and therefore we will continue to keep a close eye on the costs and benefits and the Government has to make its case.”
He continued: “There is no formal mechanism or timetable. We may decide one way or another before the election.
“We may decide we’ll keep this under review and look at this properly once we are in government after the election.”
The Department for Transport and rail industry experts warn that the existing rail network, and in particular the East Coast Main Line and West Coast Main Line, cannot cope with growing demand for rail travel.
A new report published by the Department for Transport said: “The West Coast Main Line is under stress because there is more demand for train services than there are train paths available. This not only limits overall capacity, but means there are trade-offs about deciding which services can run.”
Speaking in the House of Commons, David Cameron accused Labour of “petty politicking” over HS2, saying: “There is a real danger with Labour’s antics that they are letting down the north of England, letting down the Midlands.”
Trains are set to run from 2026 if HS2 goes ahead.