Costs of the long-awaited tram scheme have continued to rise

They remain confident despite a National Audit Office report saying future schemes could be at risk because of the failure of existing ones.

The controversial scheme to link Fareham, Gosport and Portsmouth was originally estimated to cost �170m.

Its backers are still waiting to hear whether the government will support the system despite rising costs.

The social, environmental and economic benefits would outweigh the project costs by nearly two-to-one Councillor Keith Estlin

So far Hampshire County Council and Portsmouth City Council have spent �9.5m of taxpayers' cash on developing the scheme since 1990.

They hope to hear whether the government will still pay its share of the scheme's cost by July.

Councillor Keith Estlin, the county council's environment boss, said: "There is no doubt that there continues to be widespread commitment to the scheme, not just from the local authorities but from local members of Parliament, the Government Office for the South East, and regional planning and development agencies.

"The social, environmental and economic benefits would outweigh the project costs by nearly two-to-one.

The National Audit Office has criticised existing schemes

"That's taking into account the environmental benefits gained from removing three million car journeys from local roads every year and the regeneration opportunities delivered by improved access."

The scheme's costs increased after the MoD demanded that a proposed tunnel under Portsmouth harbour had to be deeper to accommodate new ships.

Higher insurance premiums, inflation in construction costs and a "cautious" assessment of future income from fares have also been blamed.

If the government backs the scheme, the best of two consortia bids will be selected and work could start by 2005.