The 拢350m Leeds supertram scheme looks set to be scrapped after the government told council leaders it did not believe the scheme was affordable.

In a meeting on Tuesday, transport minister Derek Twigg told representatives that the scheme was not possible at its current price, and said the DTI would work with them to consider alternative solutions for transport in Leeds. A final decision on the future of supertram is expected in September.

Mark Harris, Leeds council leader, who attended the meeting with Twigg, said he was frustrated with the government鈥檚 reaction to the scheme, which has been under consideration for 15 years. He said: 鈥淚 am deeply disappointed that the transport minister was still not able to give us the go-ahead for supertram and in fact asked us to consider alternative proposals.鈥�

It is understood that Harris and Karam Hussain, the chairman Metro, the council鈥檚 transport agency, will now meet the two remaining bidding consortiums on the scheme to confirm they are still interested. These are Momentis, which includes Bouygues, and Airelink, which includes Amec.

A source close to the project said that if the scheme lost the support of either bidder, that could seal its demise. He said: 鈥淯p until now, the two consortiums have been fully supportive of the scheme. Realistically, they will have to remain that way for the scheme to have any chance of continuing.鈥�

The council will work with the Department for Transport to review all alternative options for the scheme over the parliamentary summer recess, focusing particularly on the feasibility of guided bus routes, and will look at securing local funding for any scheme that does go ahead.

A decision must be taken by September if the council is to acquire land for development before its compulsory purchase powers for the project expire.