The Metro needs more than £30m to keep trains running safely and in a worst-case scenario some stretches could close, the operator has warned.
Nexus had planned £57m renewal works across the system between 2023 and 2025, but was awarded government funding of only £23.8m.
This could lead to some of its "renewal programme" being paused, it said.
And while there would be no immediate impact it could bring future problems including closures, Nexus added.
The planned works include refurbishing stations, replacing track and overhead lines, and restoring bridges.
The Local Democracy Reporting Service said that a report to the North East Joint Transport Committee (JTC) warned that the current funding offer "falls significantly short of Nexus' funding requirement for the Metro asset renewal programme, and dialogue with the Department for Transport (DfT) continues".
'Active discussions'
The results could include imposing speed restrictions on trains, more regular disruption to services as a result of failures, and ultimately more drastic measures such as the closure of stations or the withdrawal of services to some parts of the region.
According to a new Rail and Metro Strategy also being presented to council leaders this week, the first section of the Metro to be shut down in a worst-case scenario would be between Regent Centre and Newcastle Airport, followed by the coastal loop from St James to South Gosforth.
The committee's chair and Gateshead Council leader Martin Gannon said: "It is great that the government has provided some further funding certainty for modernisation work over the next two years to allow for the delivery of safety-critical renewals, but unfortunately the amount provided does not cover all of Metro's needs for asset renewal.
"We are in active discussions with the government in relation to this and the longer-term funding programme."
The Department for Transport has been contacted for comment.
story originally appeared: https://www.bbc.co.uk/news/uk-england-tyne-61794859.amp
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