War: Livingstone

The war of words over London's Tube has continued with the capital's mayor accusing Stephen Byers of misleading the country.

In a letter released on Monday, Ken Livingstone claimed the statements made by the transport secretary to parliament were incorrect because the deals were still being negotiated.

Livingstone claimed that when Byers told MPs in February he was backing the deals for private firms to run the Tube his statement was "highly misleading to parliament and the country".

"You were not in a position to judge the value for money of the PPP because crucial parts of the contracts, particularly relating to risk transfer to the private sector, were still under negotiation," Livingstone claimed.

"A true assessment of value for money will not be possible until those negotiations are completed. When you made your statement to the House, you were in fact well aware that Sir Malcolm Bates' letter to you of February 6 warned you that key contract terms were not final with the result that 'current bid prices are not firm'," he said.

He also claimed that the embattled minister's statement forced Tube bosses to begin agreeing final contract terms prematurely.

He believed his transport commissioner Bob Kiley had faced "an endless series of evasions and obfuscations from London Underground". He said the reason for this was because "the contracts will not stand up to objective public scrutiny".

"Had we not acted the public would have been allowed to continue to believe that the PPP was a done deal properly analysed and approved by professionals with access to all relevant material. The truth is somewhat different," he said.

Livingstone has been battling both Byers and the Tube bosses because he claims key documents are missing from the contracts which he is allowed to scrutinise.

The mayor warned that even if he does get the missing details he may still go to the High Court.

"When we are eventually provided with the final contracts for this PPP, we reserve our right to take whatever action is necessary, including legal action, to enforce London's vital interest in a safe, efficient and reliable Underground system," he said.

Stephen Byers hit back by accusing Livingstone of adding to the delays that were preventing badly-needed investment from being pumped into the crumbling network.

"The secretary of state does not accept that he misled Parliament nor that the contracts have been gutted of firm commitments," said a spokesman.

"In fact the contracts will deliver a complete modernisation of the whole network. The mayor's alternative is the threat of delay through unnecessary legal action. The time has come to stop the political wrangling, which seems to be the preferred approach of the mayor, and instead get on with the job of investing money that has been denied to the Tube for fat too long."

The latest round in the on-going spat over who will and who won't run the Tube came on the same day as an embarrassing survey revealed the City has lost faith in the government's ability to turn around the country's massive transport problems.

An Institute of Directors survey found fewer than one in 10 company bosses thought the government could solve the problem of road congestion.

Just 32 percent of directors thought the government's 10-year plan would improve performance and 46 per cent were doubted it would lead to better railways.