Ministers weighed up scrapping HS1 amid £1bn funding crisis before launch

Senior ministers privately considered abandoning the UK’s first high-speed rail line in the mid-1990s after a major funding gap threatened the project’s future, newly released government papers reveal.

Documents published by the National Archives show that, in January 1994, then transport secretary John MacGregorwarned the Treasury of a £1bn shortfall in the financing of what was then known as the Channel Tunnel Rail Link — just months before the Channel Tunnel and Eurostar services were formally opened by Queen Elizabeth II.

In a memo to Chancellor Ken Clarke, MacGregor outlined three possible responses to the crisis, one of which was abandoning the high-speed rail project altogether. That option would have left Eurostar services running permanently from Waterloo, rather than the planned terminus at St Pancras, which had already been approved several years earlier.

MacGregor acknowledged that cancelling the scheme would represent “an immense blow to the prestige of both the nation and of the government”, but said officials had significantly underestimated the level of public funding required while overstating the wider social and economic benefits of the line.

He also warned that pressing ahead without the high-speed route would expose Britain to criticism, particularly when compared with France’s already operational high-speed rail network.

“The contrast with the new line on the other side of the Channel would attract even more criticism than it does already,” he wrote.

Other options put to the chancellor included filling the gap through increased public borrowing, but the funding crisis left the future of the flagship infrastructure project in serious doubt.

The correspondence triggered a strong response from senior cabinet figures. Files show Michael Heseltine, then president of the Board of Trade, and John Gummer, the environment secretary at the time, both strongly opposed any move to cancel the scheme.

Heseltine argued that the rail link was essential to unlocking the full economic benefits of the Channel Tunnel and delivering regeneration across east London and the Thames Corridor, stating that abandoning the project at that stage would be unjustifiable.

Despite the turmoil, the scheme ultimately survived. The line — later renamed High Speed 1 (HS1) — was completed in 2007 at a final cost of £7.3bn, creating Britain’s first high-speed railway and linking London with the Channel Tunnel, Kent and mainland Europe.

Between the tunnel’s opening in 1994 and HS1’s completion, Eurostar services operated from Waterloo using slower conventional tracks. Once fully operational, HS1 cut journey times to Paris by more than 40 minutes and increased rail capacity in south-east England.

However, the project’s legacy remains contested. HS1 has faced criticism over value for money, with a recent government review concluding it delivered poor returns. It has also been criticised by regulators for service disruptions, delays and cancellations.

The newly released papers highlight how close the landmark rail project came to being derailed before it ever reached completion.