MERSEYTRAVEL yesterday decided it had run out of time in its legal battle with the government over Merseytram.
The passenger transport authority yesterday concluded that pursuing its case against the Department for Transport to the Court of Appeal was now futile.
But it refused to abandon the project altogether and insisted it would be included in the Local Transport Plan for 2006-2011.
Director General, Neil Scales, said: "It is still a good project and we've got the powers to build it, it's just not funded."
The transport authority had been trying to force the government to hand over £170m towards the £300m costs of Line One, originally pledged in late 2002 but withdrawn last November.
A High Court judge ruled against the authority at a judicial review earlier this month, leaving a challenge in the Court of Appeal as the only way forward.
But with the project already months behind schedule, it was yesterday decided any change in the decision would simply come too late.
Cllr Mark Dowd, chair of Merseytravel, said: "We've reluctantly decided not to pursue the appeal although our lawyers tell us we have a properly arguable case. It is simply a question of timing.
"We have been told we could not get a hearing in the Court of Appeal before the end of February, which means it would be impossible to meet the timescales for Merseytram Line One." But the PTA remains determined that six years of detailed preparation work will not be wasted, nor the £66m of public money already spent.
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