Tube and bus services in the capital could soon be slashed as Transport for London (TfL) is said to be a day away from running out of money amid stalling crisis talks.

The transport operator’s funds will run dry on Saturday unless it gets a bailout for the second time this year, the capital’s mayor Sadiq Khan has warned, but his officials are at loggerheads with the government over its terms.

The government has approved a billion-pound rescue package on the condition that fares increase, the removal of remaining free travel allowances for children and pensioners, and a widening of the capital’s congestion zone, according to Sky News.

Mr Khan has refused the conditions, prompting TfL to schedule an emergency finance meeting due to be held on Friday that could lead to Tubes and buses being cancelled.

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A source in the mayor’s office told City A.M. last week that among the Mayor’s officials there was a ‘vague sense that [negotiations] are f****d’ and that the calling of the meeting could indicate the deadline will be missed.

Tony Travers, professor of local government at the London School of Economics, told the newspaper it could result in a Section 114 notice, which would ‘likely mean a quite radical reduction in [TfL] services’.

Section 114 notices allow public bodies to declare themselves effectively insolvent.

A source close to the mayor told Sky News negotiations were continuing about a deal to keep TfL services running, but added: ‘Conditions such as extending a £15 congestion charge to the North and South Circular and taking free travel away from children and older people would be totally unacceptable to the mayor and he would not ask Londoners to accept them in these exceptionally difficult times.’

If approved, the billion-pound bailout would only be enough to keep TfL running for two months.

Mr Khan has previously asked for a £5.7 billion package to protect it for the next 18 months. He is now reportedly holding out for a new bailout worth roughly £2 billion.

Conservative mayoral candidate Shaun Bailey has supported Mr Khan’s opposition to the congestion zone extension but said the very reason it was on the table is due to financial mismanagement by his own officials.

He said: ‘Under no circumstances would I back an extension of the congestion charge zone, regardless of who proposes it… Any extension would hit hard working Londoners in the pocket and be a death knell for small businesses.’

But, he added, ‘Khan has near bankrupted TfL and hung a closed sign over London’,

TfL previously came within days of issuing a Section 114 notice before it secured its first bailout after the coronavirus pandemic in May, amounting to £1.6 billion.

That deal meant the government can now nominate two representatives to TfL’s board and set requirements for more comprehensive reviews of its finances.

A spokesperson for TfL said the body aims to ‘continue operating a full service’ across its network while the funding talks go on.

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