Costs have risen since the scheme was approved in 2002

Councillors in Liverpool and Knowsley were expected to decide by 31 October whether they would cover the scheme's �20m contingency fund.

Transport Minister Derek Twigg wants an agreement by that date - but Liverpool council does not meet until 4 November.

A Merseytram spokesman said the company was hoping to persuade the government to give them more time.

"It will be a tragedy if the scheme was to be abolished for the sake of a few days," he told BBC News.

'Hurry up' call

Merseytram and its partners would be making their views known to the government, the spokesman added.

The �20m contingency fund would be used in the event of the construction of Line One - the first of three proposed routes - running over budget.

But the government has refused to increase the �170m it pledged towards the project in 2002 and wants the local authorities in Liverpool and Knowsley to underwrite any funding shortfall.

Mr Twigg, the Labour MP for Halton, set out his concerns in a letter to Merseytravel chairman Mark Dowd on Thursday.

Merseytram said it was confident - along with its partners - that it could satisfy the government's funding requirements.

Those involved in the project said they believed the letter was intended as a "hurry up" message by the government.