The Treasury is prepared to lend all the debt required to PFI projects to ensure that billions of pounds worth of education, waste and transport schemes go ahead, Yvette Cooper, chief secretary to the Treasury, said yesterday.

The move would in effect turn the private finance initiative into a largely public finance one, with the Treasury making clear it is ready to provide virtually all the cash needed to get £8bn worth of projects off the ground over the coming year.

Gordon McKechnie, head of PFI and private-public partnership policy at the Treasury, said capital was drawn down in stages as projects were built, and the upper end of the Treasury’s estimate that £1bn to £2bn might have to come from the taxpayer over the coming financial year assumed that there was virtually no lending at all from the banks.

Financial Times, Daily Telegraph