Taxpayers are to cover nearly all of the debt owed by Metronet Rail after creditors exercised their right to call in public-sector guarantees for 95% of the value of the debt of the collapsed private underground contractor. Financial Times

The Department for Transport yesterday announced it would pay Transport for London, the London mayor’s transport organisation, £1.7bn to cover the cost of the guarantees, at the same time as announcing a £39bn funding package for the organisation over the next decade.

TfL was facing the bill for Metronet’s debt after lenders to the company exercised a so-called put option, allowing them to demand repayment of 95% of the company’s debt six months after it went into administration.