Boris Johnson and Transport For London have decided to delay the expansion of the Docklands Light Railway towards the outer London borough of Dagenham.

Next month’s public enquiry for the scheme, which had been backed by previous mayor Ken Livingstone, has now been postponed.

Pressure group, Labour on the London Assembly reacted with anger to the news, accusing the mayor of ‘ripping the lifeline from an outer London’ by ‘wielding his axe over another key local transport scheme.’

It said that five months of planning and consultation over the extension to Dagenham Dock has cost £5million, and Labour's transport spokesperson, Val Shawcross called it ‘a funding black hole’.

She said: ‘Sadly it's no surprise to us that the Mayor is deprioritising those transport schemes that would regenerate poorer areas of London.

‘There's uncertainties on the Cross River Tram, delays on the Greenwich Waterfront Project, and the Thames Gateway Bridge is under threat. Now we have a funding black hole for yet another vital transport scheme.’

Funding plans for the scheme had included PFI (similar to the successful DLR extension to London City Airport and the nearly completed Woolwich Arsenal extension), but TfL have now ruled out this funding option.

Local Assembly member John Biggs said: ‘Pulling local schemes like this effectively rips lifelines from outer boroughs who, before the GLA existed, felt excluded from the capital's transport infrastructure. It's devastating to realise that residents in the outer boroughs are already being treated as outcasts in Boris's vision for London.

‘Boris and TfL are looking to blame central government for the funding gap, but the fact is they hadn't even bothered to apply to government for this money.’

But a spokesperson for the Mayor of London said: 'The Mayor finds claims that he is purposefully pulling the plug on schemes in poorer areas of London completely incredulous. He is absolutely committed to ensuring the future prosperity of the capital and regenerating the areas in greatest need.

'Funds are already in place for development and design work of the Dagenham Dock extension but, given the current economic situation, Transport for London and the Department for Transport have agreed to postpone the beginning of a Public Inquiry while it is clarified whether the Government will be able to commit further funding for construction. This is simple logic.

'The Mayor is aware of the concern that Londoners must be feeling at the constant stream of financial stories in the media. And he believes that it is completely wrong of Assembly members to suggest that this is anything other than taking a responsible approach to the new economic reality.'