All or part of London Underground could be handed to London mayor Ken Livingstone, Stephen Byers suggested last night.

Speaking to the Commons transport select committee, Byers said that ministers were considering alternatives to public private partnership proposals for the tube in case bids by two private sector bidders failed to meet the value for money tests.

"Keeping [the Underground] in the public sector and handing it over to Transport for London will certainly be one of the options we are considering," Byers said.

Byers' department last night admitted that consultancy fees for advice on the public private partnership for the London Underground was expected to total £98 million.