London’s Crossrail was given the go-ahead today after a £16bn funding deal was hammered out between government and London businesses to secure its construction.

The cost will be split between the Government, Crossrail farepayers, and the private sector. The full details will be set out in the Comprehensive Spending Review.

This morning Prime Minister Gordon Brown said: ‘I believe this is a project of enormous importance not just for London but for the whole country. By generating an additional 30,000 jobs and helping London retain its position as the world's pre-eminent financial centre, it will support Britain's economic growth and maintain Britain's position as a leading world economy.

The Chancellor of the Exchequer said: ‘Crossrail is key to the long term development of London and the UK…We are able to afford this investment on the foundation of a strong economy.’

Michael Snyder, chairman of the City of London’s policy and resources committee, today also confirmed that the City would contribute £350m towards the cost of Crossrail’s construction.

It will include a £200m one-off lump sum, payable to the government in 2015/2016, from the City’s own funds. The additional funding, totalling £150m, will be raised from businesses across London.

Michael Snyder said: ‘The City Corporation has been pushing for Crossrail for nearly 20 years, and I personally have been working for over ten years to reach today’s decision. The City Corporation has a long history of funding major infrastructure projects in London, not least the original underground railway in the 1860s and five Thames bridges.’

Crossrail will link Maidenhead and Heathrow in the west with Shenfield and Abbey wood in the East. Work is expected to begin in 2010 and the first trains should be running by 2017.