MINISTERS at Holyrood are to fund a new railway line between Edinburgh and the Borders — but only on condition that stringent financial conditions are met.

The Scottish Executive has promised to provide £115 million of the estimated £150 million needed for the line if the project’s backers come up with a sustainable business case.

The decision opens the way for a partial reversal of one of the most controversial of the Beeching rail line cuts of 40 years ago. There are, however, doubts in some quarters about whether the opening of the line will ever actually happen.

Behind the funding agreement has been a wrangle between Labour and Liberal Democrat ministers in the coalition Executive.

Nicol Stephen, the Lib Dem Transport Minister, told a committee of MSPs yesterday the cash would come with strings, one of which is that assumptions in the business case must hold good. These relate to customer levels, the containment of costs and housing growth projections for the area to provide a steady and reliable passenger stream. Another condition is that the project’s backers, which include local authorities, come up with “a comprehensive strategy” for managing the cost of the project”.

Mr Stephen said: “Reopening the rail line will provide greater opportunities for people in the Borders and Midlothian, helping to stimulate a sustainable economy in the Borders, to attract investment, and crucially to encourage more young people to remain.”

The project is dear to the Lib Dems, who hope to do well in the area at the general election. But Labour ministers were incensed last week when there were reports that the cash would definitely be handed over. They pointed out to Jack McConnell, the First Minister, that the financial case would have to be proved — especially as there were other transport priorities facing the Executive such as the upgrading of the M74 and rail links to Edinburgh and Glasgow airports.

Labour sources have said they suspect Lib Dems of briefing Sunday newspapers and attempting to discredit Labour in the eyes of Borders voters.

Mr Stephen’s announcement yesterday was, however, far from the expected victory for the rail line campaigners and was criticised as inadequate.

Chris Ballance, Green MSP for South of Scotland region, said that Mr Stephen had promised £115 million towards a railway which was going to cost £150 million. “I think it is very disappointing the minister did not give a complete commitment to fund a decent railway for the Borders instead of a partial funding hedged around by conditions that have to be met,” Mr Ballance said.

Christine Grahame, SNP MSP for South of Scotland region, suggested that the Lib Dem minister had been pressurised by Labour colleagues. “Over £36 million remains unaccounted for,” she said. “Where are the missing millions needed to fund this project to come from?” The Strategic Rail Authority has said it is unlikely the new line will ever be profitable and that it will need annual subsidies to top up the finding.

The major question to be resolved is over the reliability of forecasts that 10,000 new homes will be built as a result of the line being opened.

The new 35-mile line would run from Newcraighall in Edinburgh to Tweedbank in the Borders, providing six new stations — Shawfair, Eskbank, Newtongrange, Gorebridge, Galashiels and Tweedbank. It would be a partial reinstatement of the old Waverley railway which ran to Carlisle before falling victim to the Beeching rail cuts in 1969.

Explore UK News

• Crime News

• Education News

• Health News

• Scotland News

Times Recommends

• Milk: do we need a dairy godmother?
• DIY: the women doing it for themselves
• First double portrait of Princes unveiled