The government has denied it is considering a deal with Ken Livingstone which could see the London mayor dropping plans to introduce congestion charges in exchange for full control of the Tube.

The unconfirmed reports suggest that Whitehall is developing a plan which would call a halt to controversial plans to charge motorists £5 a day to enter the capital.

In exchange for scrapping the plans, it is claimed that the mayor's demands on London Underground will be met.

However, the Department of Transport, Local Government and the Regions said that the story was "absolute nonsense".

The Greater London Authority also denied the existence of such a plan.

Mayor Livingstone's office said: "We can categorically say that there is no such deal. No offer has been made by the government."

If there is a deal, it could mean ministers climbing down on controversial plans for a public private partnership for the Tube.

Transport For London, which would gain control over the Tube should a deal be made, remains opposed to the idea of a partial privatisation of the Underground.

It said it was "ready to discuss" the privatisation plans with the government.

However, the organisation said it would not discuss dropping congestion charges.