We will consider the judgment carefully with our lawyers

Ken Livingstone

But Mr Justice Sullivan rejected the application, ruling it was for the government, not the Mayor of London, "to have the last word".

After the hearing Mr Livingstone said the judgment made clear that the decision was not on whether the government's PPP was safe or efficient.

"The court's decision is simply that, irrespective of these issues, the government has the legal right to impose this scheme on London," he said.

"We will consider the judgment carefully with our lawyers before making any decision about whether or not to appeal."

Leave to appeal

It was reported that Mr Livingstone and TfL were given leave to appeal, which could take place on 17 September.

Susan Kramer, of Transport for London, said the judge's ruling went against the will of Londoners.

"The reality of PPP is very much like the issue of Railtrack and at some point it will unravel," she told the BBC.

London Underground managing director Derek Smith said: "This is just the beginning.

"What we need to do is start modernising the railway not have court cases. I hope there are no future appeals."

Under PPP, maintenance and renewal of the network including track, tunnels and signals would be undertaken by private companies on 30-year leases, while management of the system would remain the responsibility of London Underground Limited (LUL).

Metronet, the preferred bidder for the Bakerloo, Central and Victoria lines infrastructure company, welcomed the ruling.

'21st century Tube'

Chief executive Rod Hoare said: "We are naturally pleased at the ruling and we sincerely hope that the court's decision is accepted by all parties.

"The PPP is all about partnership and together we can achieve what London and the travelling public deserve - an Underground fit for the 21st century."

But Richard Gordon QC, for TfL had told the hearing last week that PPP would leave Mr Livingstone to "carry the can" for a system he was responsible for but had little control to manage,

He said the government was defying parliament's wishes in trying to force through PPP because parliament had set up the legislation to install a democratically elected mayor who would eventually have control over the capital's transport network.

Last week, John Howell QC for London Regional Transport (LRT) and London Underground (LU), argued that Mr Livingstone's case was without legal foundation.