The London Mayor, Ken Livingstone, has called on the government to provide an extra �1.5bn to fund plans to privatise the Tube.

Without more money fares would increase, council tax would rise significantly and other transport projects would have to be cut, he claimed.

Mr Livingstone made the demand at a meeting with transport minister John Spellar to discuss transferring control of the Tube to the mayor's transport authority, Transport for London.

It comes after the collapse of the mayor's High Court challenge against the public-private partnership (PPP) scheme to run the underground network.

'Financial timebomb'

The mayor told Mr Spellar the scheme would leave a �1.5bn funding gap in its first seven years, which should be plugged by government.

After the meeting Mr Livingstone said: "The minister made it clear that they did not want to transfer a financial timebomb.

"As it stands at the moment there is still a funding gap.

"What I'm pleased about is that we are working towards a resolution by the next spending round or by the 2004 spending round."

'Productive' meeting

Mr Spellar, who would not say if extra funding was on offer, said: "I think we made good progress."

He described the meeting as "very good and productive".

The government hopes PPP will bring a �16bn investment in the London Underground.

The PPP will split the Tube infrastructure into three parts, leased for 30 years to two private sector consortia - Metronet and Tube Lines Group.

Train operations remain in public hands.

The European Commission is still considering if the scheme breaks European Union state aid rules.

The Commission is expected to rule on the case in September, opening the way for contracts to be signed by the end of the year.