Rishi Sunak is expected to overrule the concerns of Tory grandees, businesses and northern leaders by scrapping HS2 to Manchester in a chaotic mid-Conservative conference announcement in the city.
A package appeared to have been signed off by Chancellor Jeremy Hunt on Monday amid suggestions the pill could be sweetened by improvements for northern infrastructure.
Downing Street insists that “no final decisions” have been made over axing the northern leg of the high-speed rail plans from Birmingham, with Cabinet sign-off expected before an announcement.
But a spokesman for Mr Hunt set the hares running by declining to deny plans had been approved in the Treasury, carefully saying: “A decision will be announced in due course.
“It’s not the Treasury’s announcement… it’s for the Prime Minister.”
No 10 said that some reports on the plans were “incorrect”, but did not set out which details were wrong and did not deny that a Cabinet meeting would be arranged.
Tory mayor of the West Midlands Andy Street made an impassioned last-ditch appeal to Mr Sunak not to cancel HS2 to Manchester.
“You will be turning your back on an opportunity to level up – a once-in-a-generation opportunity,” he told reporters at the conference.
“You will indeed be damaging your international reputation as a place to invest.”
Mr Sunak’s set-piece speech at the Manchester conference – where the party slogan is “Long term decisions for a brighter future” – is scheduled for Wednesday.
Labour’s shadow transport secretary Louise Haigh said: “This fiasco shows the Conservatives are too divided and too distracted to take this country forward.
“After weeks of chaos and indecision on the biggest infrastructure project in the country, Rishi Sunak’s relaunch is now coming off the rails.
“This shambolic conference is showcasing precisely why working people cannot afford five more years of the Conservatives.”
An expanded Northern Powerhouse Rail project linking northern cities and fresh cash for potholes and bus routes could be announced to soften the blow.
But the drastic cost-cutting exercise amid suggestions the price-tag has spiralled past £100 billion could also see HS2 end at Old Oak Common in the capital’s western suburbs.
Boris Johnson has warned that failing to build it to Euston would render it a “white elephant”.
Andy Street, the Tory mayor of the West Midlands, is also among the critics of scaling back the project, while London mayor Sadiq Khan warned it could make the UK a “laughing stock”.
Neither the Chancellor nor Transport Secretary Mark Harper mentioned the future of HS2 in their conference speeches despite continued reports that it would be scaled back.
Conservative Tees Valley mayor Ben Houchen told a conference fringe event that the “indecision” on HS2 was causing a “distraction” as he urged ministers to commit to Northern Powerhouse Rail.
Along with Mr Johnson, fellow Tory former prime ministers Theresa May and David Cameron have all issued warnings against scaling it back.
There had been speculation Mr Sunak would announce cutting back HS2 before the Manchester conference but that did not come amid warnings it would be damaging as Conservatives descend on the city.
Mr Hunt admitted on BBC Breakfast to flying to the conference because his train was cancelled.
Greater Manchester mayor Andy Burnham said curtailing HS2 would be “profoundly depressing” and leave northerners treated as “second class citizens”.
West Yorkshire mayor Tracy Brabin, a fellow Labour politician, said: “The Government has left us hanging by a thread for weeks as mayors from across the country urged the Prime Minister to think again before cancelling the northern leg of this vital infrastructure project.
“Pulling the project now would be a scandalous waste and would represent the final nail in the coffin for any notion of levelling up.”
Liberal Democrat transport spokeswoman Wera Hobhouse said: “Rishi Sunak using a conference in Manchester to cancel the northern leg of HS2 would make Liz Truss look like a political genius.
“Yet again, a Conservative Party conference has become mired in chaos while the country suffers.”