 MERSEYSIDE'S transport leaders are considering legal action after the Government scrapped the region's £500m trams scheme, the Daily Post can reveal. Transport Secretary Alastair Darling yesterday refused to release the vital £170m Treasury funding in a blow which put the final nail in the coffin of the project. The decision sparked a bitter row over who was responsible for the scheme's collapse, with the majority of the region's politicians laying the blame firmly at the Government's door. Line One, seen as central to the city's regeneration, has already cost at least £35m of taxpayers' money with foundations currently being laid as part of Liverpool's Big Dig roadworks. Last night, the Daily Post learned Merseytravel was consulting lawyers to consider what action it can take against the Government. One option could be to apply for a judicial review, meaning a judge would be asked to rule whether the Government had reneged on its agreement to provide the £170m, initially pledged in December, 2002. Lawyers will also be asked if there is any way the £35m already spent on the route between Liverpool and Kirkby can be recovered, it is understood. Transport minister Derek Twigg was yesterday scathing about Liverpool City Council's refusal to underwrite any future cost overrun - insisting that alone killed Merseytram stone dead. The two councils had pledged a £24m emergency fund, but stopped short of writing what they described as a "blank cheque" to finance any further escalations. Councillors insisted it would have been illegal to approve such a move with out carrying out a "due diligence" exercise to assess the risk, after advice from solicitors for both Liverpool and Knowsley. Mr Twigg laid bare his disbelief that Liverpool was not convinced by Merseytravel's guarantees that it could raise any additional funds, yet expected the Department for Transport to take them on trust. He accused the local authority of wasting months when it could have carried out the necessary "due diligence" work to be certain the cost projections were watertight. And he came close to suggesting Liverpool was passing the buck to Merseytravel by expecting the passenger transport authority to provide those guarantees. | 
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