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Transport secretary Louise Haigh has confirmed that the High Speed 2 rail link from Birmingham to London will go to Euston station rather than ending in the suburbs.
There had been speculation that the controversial line, which has already been cut to half its original size, would end at an interchange in Old Oak Common in Harlesden, north-west London, in order to save taxpayers’ money.
But Haigh said on Tuesday morning that this option would be illogical.
“It would never have made sense to leave it between Old Oak Common and Birmingham,” she said. “Euston was always planned to be part of the picture for HS2. We are hoping to make an announcement on that very soon.”
Downing Street refused to comment beyond the transport secretary’s comments.
Last year Rishi Sunak, then Conservative prime minister, cancelled the northern leg of HS2 between Birmingham and Manchester in an attempt to tackle soaring costs.
Sunak had wanted to end the line at Old Oak Common but was persuaded by Jeremy Hunt, his chancellor, to continue for another four-and-a-half miles to the planned terminus at Euston station on the northern edge of central London.
Under that plan private developers would build offices, homes and shops above Euston and raise billions of pounds that could retrospectively pay for most of the new line.
However, no deal with the private sector has been reached and work on the link to Euston remains stalled since the government told contractors to lay down their tools in March 2023.
It has been almost a decade since demolition work started around Euston, dislodging homes, offices and shops.
The Tory government was poised to sign off £1bn of initial taxpayer funding for the line in the early summer but this plan was derailed by the July general election.
The Labour government has not set out precisely how it will fund the project but is expected to follow a similar path.
Maryam Eslamdoust, general secretary of the TSSA rail union, welcomed Haigh’s comments.
“This is undoubtedly the right move from the government and one we welcome as a crucial win for north-south connectivity,” she said. “Failure to complete this section would have seriously reduced capacity and undermined its long-term value.”
John Dickie, chief executive of BusinessLDN, a pro-business lobbying group, has said the regeneration of Euston that will come with HS2 could contribute £41bn of economic output over the next 30 years.
Meanwhile, Haigh has delayed a decision on whether to build the Lower Thames Crossing, a £9bn new road crossing under the Thames between Gravesend in Kent and Tilbury in Essex.
In a statement issued late on Monday, the transport secretary said the delay was to “allow more time for the application to be considered further, including any decisions made as part of the spending review”.
It is the third delay to the decision this year. More than £800mn has been spent on the project, which is designed to ease congestion on the Dartford Crossing further up the Thames.
In July, chancellor Rachel Reeves cancelled several other big infrastructure projects to try to save billions of pounds, including the tunnel near the ancient monument of Stonehenge.