A high-powered inquiry has slammed the Government for pouring money into London’s transport network and ignoring the needs of the West Midlands and North of England.

The Labour-dominated Transport Select Committee accused Ministers of diverting cash for new rail lines and stations to the South-east.

It welcomed plans to redevelop Birmingham’s New Street station, but pointed out that transport spending in London is £836 per head - more than three times the £269 per head spent in the West Midlands and the North.

And in a report published following a three-month inquiry, the committee warned that the gap is growing wider.

Spending in London has risen by 57 per cent over the past five years, and just 25 per cent in the Midlands and North.

Major projects in the capital have included Thameslink, a £5.5 billion programme to improve rail services within London to provide passengers with an alternative to the Underground and increase capacity in time for the 2012 Olympics.

But the Transport committee also played down the importance of a planned new high speed rail line between London and Birmingham - and suggested that the Government should concentrate on improving rail services to Manchester instead.

The committee, whose members include Shropshire MP Mark Pritchard (Con The Wrekin), said the Government was investing in transport where there appeared to be the greatest need, for example because trains were overcrowded.

But high demand for transport was often a result of rapid economic growth, which was itself partly caused by high public spending.

Ministers should instead pump money into less wealthy parts of the country where the economy was not growing as quickly, the committee said.

The committee warned: “London’s rail network will continue to require investment . . . especially to increase capacity on certain commuter routes. However, projects to enhance capacity elsewhere on the network, particularly in the North, are long overdue, and the balance between investment in the South-east and elsewhere needs to be realigned.”

MPs welcomed plans for a new high speed rail line to connect London and Birmingham, and warned that the existing West Coast Main Line was expected to run out of capacity by 2020.

But they also said that funding for high speed rail should not be at the expense of funding for improvements to the existing network - and claimed that the government should concentrate on improving links between Manchester and other northern cities such as Leeds, Liverpool and Newcastle.

The MPs said: “It is essential that investment in a high speed rail network does not detract from necessary medium term investment on the “classic” network. Capacity constraints on the classic network look set to worsen in the next decade and we must continue to invest to address these problems.”

Launching the report, Louise Ellman, the committee’s Labour chairman, said “It’s paramount we do not deprive future generations of a lasting legacy of good transport services. Investments made now or in the near future should reflect long-term needs of the economy and society.”

Ashwin Kumar, rail director of train customer watchdog Passenger Focus, said: “Passengers tell us that among their top priorities for investment on the railway are more trains, punctual services and getting a seat, and these are echoed in the committee’s report.

“The railway is getting busier and Government and industry must continue planning for new lines, new trains and new infrastructure to cope with more services. But in the meantime, disruption is a big issue for passengers now and the entire industry has to work at how it handles disruption if it’s going to improve passenger satisfaction.”