The Department for Transport will provide a loan of up to £1.3Bn to the Greater London Authority (GLA) to deliver the final stages of the project.

This is expected to be repaid via the capital’s business rate supplement and from the Mayoral community infrastructure levy to be supplemented by a £100M cash contribution from the GLA.

It has also been confirmed by Crossrail’s chief executive Mark Wild that the project’s planned opening date, which already slipped from this month to next autumn, can not be guaranteed.

“Since I joined Crossrail in November I have been reviewing the work still required to complete the core stations and rail infrastructure and begin the critical safety testing,” he said. “It is evident that there is a huge amount still to do. Stations are in varying stages of completion and we need time to test the complex railway systems. This means that I cannot at this stage commit to an autumn 2019 opening date.”

Responding to the news, London Assembly Transport Committee chair Caroline Pidgeon said: “This really is the worst case scenario. Londoners are having to foot an even bigger bill than anticipated and the opening is now at an unspecified time.

“Who knows how this will affect the rest of the budget and what will happen to projects that need Mayoral funding.”

Business Group London First’s executive director for infrastructure David Leam said: “After all the mudslinging, this new funding and financing package must signal the final chapter for Crossrail. It’s vital that all efforts now focus on getting it completed. 

“London’s firms are bearing a significant chunk of the costs of these overruns and, in return, want to see a clear timetable for opening and better governance, including a stronger business voice on its board.”

The new funding agreement replaces the need for a £350M interim package announced by the Department for Transport in October. As the final costs of Crossrail are yet to be confirmed, the department has also agreed a contingency package with Transport for London – a loan of up to £750M – in the event that further finance is required.

Greater clarity about the scheme’s opening date and the level of any additional funding required is expected to be provided in the New Year.

It has also been revealed this week that Infrastructure & Projects Authority chief executive Tony Meggs will step into the role of Crossrail chair following Sir Terry Morgan’s resignation.

Government has also moved quickly to appoint a successor to Sir Terry on High Speed 2, with former Atkins chairman Allan Cook replacing him as chairman of the scheme.

• Transport for London has announced a round of job cuts to back office staff and middle managers as the organisation looks to make savings. It also hopes that recent ‘tight financial management’ will have reduced its budgeted operating deficit of £968M by more than £200M before the end of the current financial year.

Its draft business plan for the next five years also sets out TfL’s infrastructure improvement priorities.

These include completion of signalling upgrade programmes on the Circle, District and Hammersmith & City and Metropolitan lines; station upgrades at Elephant & Castle, Holborn and Bank; opening of the Northern Line extension to Battersea; more step free access across its network and improvements to road junctions such as Old Street, Vauxhall and Highbury Corner.

(Photograph: TfL)