Both projects were first mooted in the 1980s. CrossRail will run from Paddington in the West End to Liverpool Street in the City, with stations at Bond Street, Tottenham Court Road and Farringdon. Several sites - for instance in Hanover Square, W1 - have remained blighted for over a decade because of possible station development, but Macdonald said the stations would be redesigned under the new scheme, and they might require different access points.

Lord Macdonald also signalled a new feasibility study into a line linking Wimbledon in south-west London to Leyton and Finsbury Park in north-west London. The line would broadly follow the proposed Chelsea-Hackney route, with stations at Clapham Junction, Victoria, Tottenham Court Road, Kings Cross and Hackney.Engineers Arup have put the cost of CrossRail at £3.8 billion ($5.45 billion) and the Chelsea-Hackney line £4.8bn ($6.85 billion).

With the announcement coming some four weeks before the expected General Election, and at a time when the Government is seen to be in political turmoil over its plans for the part-privatisation of London's underground system, Lord Macdonald said: 'This demonstrates our commitment to the development of rail schemes in London. This is a first step and there is much work to be done to identify the best options, but today's decision represents real progress towards providing London with a world-class rail network.'