David Cameron has insisted he remains firmly committed to building a new North-South rail line - despite growing criticism of the project, which is expected to create thousands of West Midlands jobs.

Ministers and the rail industry insist a new network is needed because existing rail lines are running out of capacity, and a study by KPMG found the network would create 50,000 jobs in the region.

But there has been criticism of the estimated £50.1 billion cost, which includes £16.1 billion in contingency funding and £5.8 billion for new trains.

Ed Balls, the Shadow Chancellor, suggested at Labour’s conference last week that Labour might prefer to spend the money on other things.

But Mr Cameron said there was no change in his commitment to building the line, which will include a new station in Birmingham city centre and a second near Birmingham Airport.

He was speaking in Downing Street in the run-up to the Conservative conference in Manchester, beginning this weekend.

He said: “On HS2, the new North-South railway line, we will be making the case very strongly for it.

“The rest of the world is adopting high speed rail technology. We should be doing the same.”

“We have to build the new West Coast Main Line. The capacity needs to be expanded.

“So our real choice as a country is do we build an old-style Victorian railway, or do we build one of the new high speed railways? It seems to me absolutely right to choose the high speed version.

An artist's impression of the HS2 train
An artist's impression of the HS2 train

“And all those people who are worried about the costs of this investment - in the next Parliament, 2015 to 2020, we will be spending more than three times much on other rail and transport projects as we will be spending on HS2, including £37 billion on other parts of the railway.”

But in what might be a sign that he hopes to maintain - or rebuild - a cross-party consensus in favour of the line, Mr Cameron declined to criticise Labour for its lack of support.

“I don’t believe Labour in the end will go wobbly on it because they will be completely turning their backs on the North of England . . . so I don’t believe they’ll do it but be in no doubt my enthusiasm is not dented in any way and we are going to re-thrash the argument for HS2.”

The Prime Minister also defended spending cuts imposed on local authorities - and said that while they had led to public sector job losses, far more new jobs had been created in the private sector.

“Every council has had to take difficult spending decisions and has had to find efficiencies, because we inherited a situation where the public sector was too big and the private sector was too small.

“Overall, what’s happened is people said to us ‘private sector jobs will never make up for the ones you are going to lose in the public sector’ - but that hasn’t been the case.

“Over the last three years more than four times as many jobs have been created in the private sector than have been lost in the public sector.

“That adjustment had to happen frankly whoever was sitting in Downing Street.”

He said the Conservative conference would be a chance to set out why the country should elect a Conservative Government at the next election - with enough MPs to govern alone, rather than in Coalition.

“We will have a very clear message which is that we are for hard working people. We are on the side of people who work hard, who want to build a good life for themselves and their families and communities, and if you play by the rules and work hard you should be rewarded rather than punished.

“I think we will be able to demonstrate to people that this country is on the right track. The economy is turning the corner. There’s absolutely no complacency but we want to finish the job.

“Finishing the job means securing a recovery for all, making sure those people who work hard want to contribute feel this is a recovery for them.”

He added: “We can do even more, even better in a Conservative majority government.”

The conference is expected to include announcements of policies to help ensure the benefits of the economic recovery are shared.

But Mr Cameron dismissed the key measure outlined by Labour leader Ed Miliband at his conference - a 17 month freeze on fuel bills to help people struggling with the cost of living.

Labour leader Ed Miliband
Ed Miliband promised to freeze fuel bills

Instead, he said that investing in “unconventional gas”, a reference to shale gas obtained through fracking, would lead to lower fuel prices.

“What we need in our country is low competitive energy prices, not for 20 months but for 20 years . . . we need to access the new technologies like unconventional gas that will help keep prices down.”

He added: “The conference is about helping hard working people.”