Last week, Trains Minister and Halton MP Derek Twigg announced the Government had decided not to let Merseytram go ahead.
He blamed the decision on Liverpool and Knowsley's refusal to go over the agreed £24m contingency.
The decision came a week after Liverpool's legal team advised the council they would be acting illegally if they agreed to cover an unlimited contingency, without a full due diligence process.
Yesterday, Merseytravel chief executive Neil Scales said: "Schemes in Leeds and south Hampshire have also been turned down. If we don't get this back on track, trams are dead in the UK.
"We started this project five-and-a-half years ago and we started from the bottom up, looking at transport across the county. We didn't just say it would be a good idea to have trams, we saw the people of Merseyside needed trams.
"We have to pursue this. It would cost the same amount of money to answer the question 'why did you spend all the money on the trams?'."
Yesterday, chairman of the PTA Cllr Mark Dowd said the Government had been "dishonourable" but also criticised council officers in Liverpool.
He said: "If they were looking for an excuse they certainly got one when they read the report by the city council's legal team. It was the council's officers who gave this advice.
"We have complied with everything. We told them repeatedly that we did not need any more money and we would not be asking for any more."
Liverpool's executive member for regeneration, Cllr Peter Millea, said: "We have not given up on the trams. We need to ask the private sector in Liverpool to consider their position. If they still want the trams, they need to come forward and support us."
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