Plans for a Birmingham underground will be mothballed later this month when the city council reaffirms support for street-level trams in the city centre.
A feasibility study, more attractive to central government funding, on light-rail operating in tunnels has now been completed.
The # 150,000 study, described to The Birmingham Post by sources from supporters of both street-running and underground camps, settles on a compromise with trams in central Birmingham streets first, with the possibility of replacing those lines with tunnels in the long term.
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It is very similar to the previously agreed phase one and phase two of the Midland Metro tram network, which was placed in doubt when the Conservative-Lib-Dem coalition took control of the city council last year.
After completion of the city centre line, the only significant tunnel proposed in the next phase will underpass Selfridges and emerge in Digbeth as part of a line to Birmingham International Airport and the NEC.
Officials from the city council-and the regional transport body Centro are working on a final report.
Both bodies did not intend to go public until the end of this month, prior to an early September meeting of the council cabinet. However, on Friday the West Midlands Local Transport Plan bid for #1.3 billion of Government cash for transport schemes included the street-level city centre line.
Explaining the LTP document's exclusion of the underground system, a city council spokeswoman said: "The section in the LTP containing the reference to on-street running was written by Centro.
"We are keeping all our options open and a report is being prepared following the feasibility study." The LTP is co-signed by Birmingham along with the six other metropolitan authorities and Centro-PTA and now represents policy.
The first draft of the underground feasibility study, which reported in May, showed a scheme with an overall cost - including financial risk and other factors on top of straight capital outlay - in excess of #2 billion. It allowed for only one or two subterranean stations, near the Pavilions Shopping Centre in the city centre and possibly under Broad Street, and involved the construction of two tunnels.
To be financially viable from day one, some or all of the metro future lines to the Birmingham Airport/NEC, Perry Barr and Quinton - already planned by Centro-PTA - needed to be completed alongside the underground.
Jerry Blackett, chairman of the West Midlands Business Transport Group and policy director of the Birmingham Chamber of Commerce, said the LTP decision to submit a bid for street-level trams in the city centre was " sensible and pragmatic".
"It is clear that is the option which would recoup the most value for money and to be honest, it is the only option that Government were going to wear bearing in mind the hurdle of cost-benefit is being set higher and higher all the time," he said.
A joint statement from Birmingham City Council and Centro-PTA stated a decision on the metro's future will be announced "in the near future".