The government finally approved the £10 billion Crossrail project linking east and west London yesterday, but it warns that substantial investment from business and investors will be needed to make the scheme work.

Alistair Darling, the Transport Secretary, said that he supported the scheme in principle and would be consulting the Treasury to see how much taxpayers’ money would be going into the project. A team is to be put together to examine how much money can be raised from the private sector.

It is hoped that between £2 billion and £3 billion will be raised from businesses and the same amount from taxpayers, with the rest being raised by the government through capital markets.

The project is for a twin bore tunnel under London connecting Romford in the east with Reading in the west, at the same time serving the Thames Gateway. The route will go through the Royal Docks, rather than Charlton as was originally suggested.

A link with Heathrow will probably also be built, but will require agreement with the British Airports Authority which owns Heathrow access rights.

The joint venture between Transport for London and the Strategic Rail Authority is expected to carry 200,000 people during the morning peak period and could create 100,000 jobs, regenerating some of the poorest parts of London, although work is not due to start for several years.

Commenting on the government's approval, the CBI urged that full consultation on how it should be funded is vital.

CBI Director-General Digby Jones said: "The scheme would make journeys faster and more predictable. It would improve links between regions and support urban regeneration and airport expansion.”

"But the whole community will enjoy the benefits, not just business. That is why we need a full consultation before any decisions are taken on how to fund this scheme. Business' enthusiasm for funding Crossrail cannot be taken for granted."

Alistair Darling and chancellor Gordon Brown will consult on funding with involved parties in the autumn. The joint venture called Cross London Rail Links will then have a public consultation on the route and a hybrid bill will go through Parliament to seek the necessary powers for the project. Assuming that process takes around a year, building could start in 2006.